Preamble

The House met at half-past Two o'clock

PRAYERS

[Mr. SPEAKER in the Chair]

PRIVATE BUSINESS

BRIGHTON MARINA BILL (By Order)

Consideration, as amended, deferred till Monday, 26th June at Seven o'clock.

Oral Answers to Questions — EDUCATION AND SCIENCE

Satellites

Mr. Marten: asked the Secretary of State for Education and Science if he will make a statement about future plans for satellite launchings.

The Minister of State, Department of Education and Science (Mr. Goronwy Roberts): I should like to take this opportunity of expressing our gratitude to the United States National Aeronautics and Space Administration for the part which they played in the outstandingly successful launch of Ariel III. Discussions have been held with N.A.S.A. about a further collaborative programme, including a successor to Ariel III. No decisions have yet been taken. In the meantime, British scientists are at work on more than 20 further scientific experiments which will be flown in E.S.R.O. or N.A.S.A. satellites scheduled for launching during the next year or two.

Mr. Marten: May I say how glad I am that the Government are considering a successor to U.K.3? Are they thinking about a satellite for surveying the natural resources of the earth, which is a very important matter? Is he satisfied with the balance of effort between scientific and commercial research on satellites?

Mr. Roberts: The responsibilities of my Department, as exercised by the S.R.C., are limited to satellites which are concerned with scientific research in space, but I have no doubt that the Council has within the ambit of its purview the point the hon. Gentleman makes. I think that the second question might be put either to my right hon. Friend the Postmaster-General or to my right hon. Friend the Minister of Technology.

Sir E. Boyle: Arising out of that last answer, does not the hon. Gentleman agree that it is of great importance that there should be proper co-ordination within the Government regarding all matters to do with space? We recognise the genuine difficulties of the organisation of civil science, but this necessity ought always to be borne in mind.

Mr. Roberts: I fully agree.

Schools, South Dorset (Sanitation)

Mr. Evelyn King: asked the Secretary of State for Education and Science how many schools in the South Dorset constituency still have no proper sanitation.

The Minister of State, Department of Education and Science (Mrs. Shirley Williams): Only in one primary school is the sanitation not waterborne. In 15 others all the lavatories are in an outside block. In a further nine, and one secondary school, some are outside, some inside.

Mr. King: Will not the hon. Lady give priority to the provision of even the most elementary forms of hygiene in primary schools over the rather dubious and certainly not urgent forms of secondary reorganisation?

Mrs. Williams: It is basically a matter for the local education authority how it decides to spend the money it has for minor works. The Moreton Church of England Primary School, the one in which the sanitation is not waterborne, is to be closed shortly.

Primary School, Kingston-upon-Thames

Mr. Boyd-Carpenter: asked the Secretary of State for Education and Science


whether he has now considered the petition sent to him by the parent/teacher association of St. Paul's Primary School in the Royal Borough of Kingston-upon-Thames against his refusal to authorise rebuilding work at this school; and whether, in view of the fact that the buildings concerned are nearly 100 years old, overcrowded, out of date, and inadequate, he will now authorise rebuilding to proceed.

Mrs. Shirley Williams: A reply was sent to the parent teacher association on 18th May. It explains why my right hon. Friend was not able to include this school in the 1968–69 major building programme. A further letter from the association has now been received and is being considered.

Mr. Boyd-Carpenter: Does not the hon. Lady think that the bringing up to date of a school of this type is entitled to very high priority? Can she give some indication that it is likely to be approved in the near future, or alternatively will she receive a deputation?

Mrs. Williams: I sympathise with the right hon. Gentleman. He will appreciate that there are, and have been for some time, many primary schools in much the same situation. The proportion of the total building programme going to primary schools is now greater than it was in 1966–67. We will certainly consider this for the 1969–70 building programme.

Prefabricated Nursery Schools

Mrs. Renée Short: asked the Secretary of State for Education and Science what progress has been made by his Department in the design of a simple, prefabricated nursery unit suitable for erection at existing infant schools and to assist the early implementation of the Plowden proposals for nursery education.

Mrs. Shirley Williams: The Department is reviewing the accommodation requirements of nursery groups and the technical means by which their needs can best be met. This is without prejudice to the Government's decisions on the particular Plowden recommendations.

Mrs. Short: Is my hon. Friend aware that in certain sections of education the Department, in conjunction with the

L.E.A., has done what is referred to in the Question? Would not this be a good way of securing the implementation of the Plowden Report and providing the additional accommodation which is necessary in very many parts of the country?

Mrs. Williams: I appreciate my hon. Friend's suggestion. We are bearing in mind in the technical review which I have mentioned the various sorts of accommodation which can be provided. The suggestion in the Plowden Report that nursery provision may be too lavish at present is one which we obviously cannot reach conclusions about before the technical review is finished.

Secondary Education (Reorganisation)

Mr. Gwilym Roberts: asked the Secretary of State for Education and Science if he is aware that some local authorities are obstructing the progress of comprehensive education; and if he will now introduce legislation to ensure the unhindered development of a non-selective educational system.

Mr. Charles Morrison: asked the Secretary of State for Education and Science what action he proposes to take when a local authority has clearly shown that it does not intend to submit proposals for the reorganisation of secondary education in their area which will be acceptable to him.

The Secretary of State for Education and Science (Mr. Anthony Crosland): The great majority of authorities have responded willingly to the request made in Circular 10/65. Until I have made further progress in the examination and approval of the plans submitted, I shall keep an open mind about possible future action.

Mr. Roberts: Is my right hon. Friend aware that many of us on this side feel that, if we are to have a non-selective equal-opportunity system of education, it is high time to stop playing noughts and crosses with Tory local education authorities and to introduce legislation to get on with the job?

Mr. Crosland: I am not sure about stopping noughts and crosses, but I think that my hon. Friend may not appreciate the facts of the situation, which are that an


extraordinarily small number of local education authorities, of whatever political complexion, are showing themselves reluctant to abolish selection, and by far the great majority are responding willingly to the request which we made in the circular.

Mr. Morrison: Will not the right hon. Gentleman agree that, far from obstructing progress in any sort of education, local education authorities are doing their utmost in the best interests of the children and families in their areas, and will he assure the House that it is not his intention to usurp the authority of local education authorities in their own areas?

Mr. Crosland: What the hon. Gentleman has said is absolutely fair. The huge majority of authorities are carefully and conscientiously doing what they believe to be in the best interests of children, and, in fact, this huge majority takes the view that what is in the best interests of the children is the abolition of the 11-plus. As to future action, I have said many times already, and I repeat briefly now, that I do not think that there will be any need for legislation because I believe that we shall continue to have the active co-operation of the great majority of authorities. If a very large number were to defy the clearly expressed national will on this subject, any democratic Government must reserve the right to express that will in legislation. However, I believe that this is a purely hypothetical question.

Mr. Longden: There is no question about abolishing the 11-plus. Everyone agreed long ago that it must go. Does not the right hon. Gentleman realise that the crux of the Opposition's objection to his education policy is that it abolishes all selection throughout secondary education?

Mr. Crosland: If hon. and right hon. Members opposite took that view about the 11-plus so long ago, it is curious that they did nothing to get rid of it when they were in office.

Mr. Molloy: Reverting to the original question, is my right hon. Friend aware that many authorities, particularly the London Borough of Ealing, have endeavoured to observe the requirements of his circular but feel to a degree that some obstruction has come from his

Department? When the Borough of Ealing submits new proposals, will my right hon. Friend give them more sympathetic consideration?

Mr. Crosland: I shall certainly try to be sympathetic, but, as I think my hon. Friend knows, the only obstruction which came from my Department in the case to which he refers was that I did not happen to agree with the precise proposals which his council put forward. I emphasise how small is the number of cases in which we have had reason to object to the detailed plans submitted by authorities in response to Circular 10/65.

Sir E. Boyle: Reverting to the right hon. Gentleman's reply to the question asked by my hon. Friend the Member for Hertfordshire, South-West (Mr. Longden), is it not the case that a large number of the most workable schemes of reorganisation were started by Conservative-controlled counties some time ago, and is it not totally unfair to suggest that Conservative authorities have nowhere been concerned to abolish the 11-plus?

Mr. Crosland: That would be totally unfair. I was referring not to Conservative authorities but to the Conservative Government. A large number of Conservative authorities showed a most striking initiative in this direction before the circular was issued. What was lacking before this Government came in was any national lead on the question.

Re-employed Retired Teachers (Pensions)

Mr. Eyre: asked the Secretary of State for Education and Science if he will revise the arrangements governing payment of pension to retired teachers who are re-employed in part-time work, with the aim of lessening the restriction on the amount of work they can do without loss of pension.

Mr. Crosland: Yes, Sir; I hope in amending regulations which will take affect from 1st July or shortly after to provide that teachers will not lose pension unless their earnings from part-time teaching and their pensions exceed the current salary of the post from which they retired. My right hon. Friend the Secretary of State for Scotland intends to do the same.

Mr. Eyre: That Answer is to be welcomed. Does the right hon. Gentleman appreciate that the change he has announced will help to attract retired teachers to jobs in areas of great shortage, such as in the big cities?

Mr. Crosland: I am much obliged to the hon. Gentleman for his comments, and I hope that it will have precisely the effect which he describes.

Mr. Rankin: On a point of order, Mr. Speaker. Did I understand my right hon. Friend to make a statement on behalf of the Secretary of State for Scotland indicating his intention in this matter, and do I take it that no further statement will be made by the Secretary of State for Scotland?

Hon. Members: Wasting time.

Corporal Punishment

Mr. Brooks: asked the Secretary of State for Education and Science whether he will give details of those schools for mentally-handicapped children in which corporal punishment is administered; and if he will make a statement.

Mrs. Shirley Williams: This information is not available. My right hon. Friend will consider the use of corporal punishment in special schools when he considers the revelant recommendations of the Plowden Committee and the comments from bodies representing the local education authorities and the teachers. I am also considering the use of corporal punishment in independent schools in my Cholderton College Inquiry.

Mr. Brooks: Does my hon. Friend appreciate that a disturbing, if isolated, case in Liverpool recently indicates that, although that case may well be exceptional, the law needs strengthening in this respect? Will she now give instructions or guidance to local authorities in dealing with this rather specialised aspect of the general problem?

Mrs. Williams: The answer to the second part of my hon. Friend's supplementary question is that, in the light of the recommendations from the authorities and from the teachers' organisations, we have already said that we shall announce our conclusions about corporal punishment. As regards the special case which

my hon. Friend has in mind. I understand that Liverpool Education Committee is at present discussing the whole question of the use of corporal punishment in its area and the present rules concerning it with the local associations of teachers.

Sir C. Osborne: asked the Secretary of State for Education and Science, in view of the fact that only two delegates out of 500 at the National Association of Headmasters' Conference at Harrogate voted to abolish corporal punishment in schools, what action he now proposes to retain this form of punishment; and if he will make a statement.

Mr. Crosland: I am aware of the views of the National Association of Head Teachers. But, as I have already said in reply to an earlier Question, I am not yet ready to make a further statement on the recommendations of the Plowden Report.

Sir C. Osborne: Since the headmasters are speaking from experience—[HON. MEMBERS: "Oh."]—since the headmasters are speaking from experience, and since they have the support of the majority of people in this country, will not the Minister act on their advice?

Mr. Crosland: They may have the support of a number of people in the country. They certainly do not have my support. I have said again and again that my personal view is the same as that of the Plowden Committee. The only practical question which we have to decide, in view of the fact that corporal punishment in the schools is on the decrease in any case, is whether to ban it by law will help or hinder the process.

Mr. Whitaker: As every country in Europe, if not in the world, other than Britain, has stopped this medieval practice, does not the Question merely show the need for retraining 498 headmasters? Would my right hon. Friend bring our schools into line with our Prison Department?

Mr. Crosland: I certainly would not like to take on the task of retraining all the head teachers in Britain. I am aware of the facts to which my hon. Friend draws attention; they were discussed in detail in the Plowden Report. From my point of view, the only question


is what best will help the process which is already under way.

Mr. Hector Hughes: asked the Secretary of State for Education and Science if, in view of the fact that corporal punishment does not inculcate either good behaviour or intellectual progress, he will take steps to ensure that it is abandoned in schools under his authority, and that where a penalty for misbehaviour is merited there is substituted for corporal punishment as a penalty extra intellectual study appropriate to the course of the particular student followed by an essay on that subject within a limited period.

Mr. Crosland: As I have said in reply to an earlier Question, I am not yet ready to make a general statement about corporal punishment in schools. In any case I should not want to prescribe particular forms of alternative punishment.

Mr. Hughes: Would the Minister agree that if duress is exercised upon misbehaving students it should take the form of encouraging them to further study in the way indicated in my Question by getting them to do extra work in their own time?

Mr. Crosland: I realise that if corporal punishment were to be abolished alternative penalties would have to be found. But I do not regard it as part of my responsibility to lay down whether this should be essays on a particular subject or anything else. I have enough difficulty with my own children without taking on the country's children.

Mr. John Hall: Would the Minister resist the suggestion, because to impose this savage punishment inflicts a greater burden both on the student and on the teacher?

Mr. Crosland: And, I may add, on parents very often.

Colleges of Education (Swimming Baths)

Mr. Cordle: asked the Secretary of State for Education and Science if he is satisfied with the number of swimming baths provided in colleges of education; and if he will make a statement.

Mr. Goronwy Roberts: At a time when resources are inevitably limited, our

particular concern must be that the 25 colleges which train intending specialist teachers of physical education should have adequate facilities for swimming, either in the form of college baths or through the part-time use of other baths that are reasonably accessible. At present, 11 of these colleges have their own swimming baths.

Mr. Cordle: But it remains the fact that only 14 out of the 160 colleges have their own pool. In view of the large number of children being drowned—157 between the ages of 6 and 15 in 1965—does not the hon. Gentleman accept that our main aim must be to have a growing number of teachers qualified in swimming, canoeing and sailing?

Mr. Roberts: We recognise the advantage of having teachers who can teach swimming. I accept, also, that it would be useful if those with a special interest in swimming learned how to teach it. But capital investment resources must for the present be concentrated on projects designed to assist colleges to expand their student numbers in order to make more productive use of existing teaching facilities.

Mr. Murray: If there has to be some priority in the provision of swimming baths, ought it not to be directed to the primary schools rather than to colleges of education?

Mr. Roberts: I am sure that my right hon. Friend has noted that point.

Plowden Report

Mr. Charles Morrison: asked the Secretary of State for Education and Science whether he has yet reached conclusions about the major recommendations of the Plowden Report.

Mr. Crosland: No, Sir.

Mr. Morrison: In the light of the proportion of the national product which seems likely to be available for education, the now defunct National Plan and the actual growth in the economy in recent years, does the right hon. Gentleman honestly believe that he will be able to implement any of the main recommendations of Plowden in the foreseeable future, or, in the circumstances, is he putting off his decision because of those considerations?

Mr. Crosland: The education part of the National Plan is still being carried out, and I have every expectation that it will be carried out, so I think that the hon. Gentleman's question may be based on a false assumption. As to why I am not yet ready to make a statement, the main reason, as hon. Members know from the debate we had, is that I have asked for the views of all the major associations of the 197 recommendations of the Plowden Report, and there are two important associations which have not yet submitted their views to me.

Sir E. Boyle: Will the right hon. Gentleman be able to make a statement on the recommendations before the House rises for the Summer Recess? Second, will he consider the representations made from this side on a number of points which do not involve great expenditure, for example, the proposal for two entry dates a year instead of three?

Mr. Crosland: I would not like to commit myself to making a statement before the House rises, though I shall certainly try. On the latter part of the right hon. Gentleman's question, I agree that some of the recommendations do not involve expenditure, but, on the other hand, almost all the recommendations are closely interlinked and I think that it would not be just to the Report itself to make a series of piecemeal statements rather than one general statement.

Overseas Students

Mrs. Knight: asked the Secretary of State for Education and Science if he has completed his inquiries into the proposals for arrangements to relieve financial hardship among overseas students studying in Britain; and if he will make a statement.

Mr. Crosland: I would refer the hon. Lady to the reply which I gave to my hon. Friend the Member for Portsmouth, West (Mr. Judd) on 5th June.—[Vol. 747, c. 143–4.]

Mrs. Knight: Will the Minister give an assurance that he will not lose sight of the fact that such aid gives a very important bonus of good will towards Britain, and that this good will is far greater than that which comes to us from other countries where large strings of grants

are made far in excess of the money involved here?

Mr. Crosland: I shall certainly bear that in mind. Indeed, I agree with what the hon. Lady said. The whole purpose of the hardship fund is to make sure that no overseas student currently here, particularly from the developing countries, will have to give up the course he is currently engaged on because of the increase in fees.

Mr. Alexander W. Lyon: Can my right hon. Friend say whether it is yet possible to tell from the statistics for admission to the universities in October how many people are likely to be accepted from developing countries, and whether this shows any fall in number in recent years?

Mr. Crosland: No, Sir. It is not possible yet to give any such estimate. When I can, I shall give it to the House. As my hon. Friend probably knows, students committed to entering a course this autumn are not excluded from the operation of the hardship fund.

Mr. Hogg: With the Summer Recess no more than two months away, will the Minister recognise that there is a time factor here and that some of us are being embarrassed by not being able to advise constituents as to what measures they must take in order to attract consideration for this plan?

Mr. Crosland: Yes, Sir. The right hon. and learned Gentleman has corresponded with me about at least one of his constituents on this. I am glad to tell the House that the Advisory Board held its first meeting only three days ago, and it will shortly hold its second meeting. Therefore, the operation is now proceeding very rapidly. The right course of action for any student who feels that he may suffer hardship is now to approach his university or college, as the case may be.

Mr. Patrick Jenkin: asked the Secretary of State for Education and Science what estimate he has made of the administrative costs likely to be incurred by universities and other institutions of higher education, the University Grants Committee and Government Departments, in operating the proposed equalisation fund for dealing with cases


of hardship to overseas students and inequity to colleges arising out of the Government's decision to increase the tuition fees of overseas students to £250 per year.

Mr. Goronwy Roberts: The costs to the British Council and the Advisory Board will be small. I do not expect that there will be identifiable increases in administrative costs elsewhere in the educational system.

Mr. Jenkin: Does not the hon. Gentleman realise that individual colleges are setting up equalisation funds, that universities are setting up equalisation funds for colleges within themselves and that now we have the University Grants Committee setting up equalisation funds between universities? Is not the hon. Gentleman aware that when the administrative costs of all this rigmarole are added up they are likely to exceed the savings which the Government hope to achieve in this exercise?

Mr. Roberts: I could not possibly accept that suggestion. We have made available a substantial sum to assist in cases of hardship. Universities and other institutions and organisations remain free to operate their own system of assistance apart from this fund. As I have said, the costs of administration are likely to be very small indeed.

Mr. David Steel: Can the hon. Gentleman say how many institutions have notified the Government that they will not follow the Government's advice by increasing overseas students' fees?

Mr. Roberts: Not without notice.

Dr. Gray: asked the Secretary of State for Education and Science if he will take steps to ensure that the fees charged for higher education in the United Kingdom to students from developing countries should be no greater than those charged to United Kingdom residents.

Mr. Crosland: No, Sir. But the position of students from developing countries has been very much in mind in the easements which I have already announced.

Dr. Gray: I welcome my right hon. Friend's Answer, but would he say something about his long-term plans in view of the fact that higher education is a

valuable form of aid to under-developed countries? One hopes that, as he said, he will treat students from such countries as being in a special category. Would my right hon. Friend give us some details?

Mr. Crosland: I agree that higher education is an invaluable form of aid, although I must add in fairness that it may be better to provide it in the countries concerned rather than in this country. I am conscious of the longer-term programme and I am keeping it under consideration with my right hon. Friend the Minister of Overseas Development.

Roman Catholic School, Northampton

Mr. Paget: asked the Secretary of State for Education and Science why, in view of the fact that there is no Roman Catholic infants school on the west side of Northampton and that no Roman Catholic school has been built in Northampton for 80 years, he has not included Kings Heath Roman Catholic Infants School in the 1968–69 programme.

Mrs. Shirley Williams: Because there was no need for additional primary school places in this part of Northampton. My right hon. Friend did include a Roman Catholic Infants School in the 1967–68 programme.

Mr. Paget: Is my hon. Friend aware that, if there is to be sectarian education at all, to have one school on the east side of Northampton and none on the west side, so that Catholic children must cross the main arteries, is very dangerous and should be dealt with?

Mrs. Williams: My hon. and learned Friend will appreciate that it is not possible to do everything at once. The school which was programmed last year is the first Roman Catholic school to be programmed for Northampton for 80 years—as my hon. and learned Friend said in his Question.

B.Ed. Degree

Mr. Hastings: asked the Secretary of State for Education and Science whether, in view of the shortage of teachers, he will institute the award of a B.Ed. degree to serving teachers of sufficient experience and upon suitable recommendations from Her Majesty's inspectors of schools and from head teachers


without their having to take a full-time course.

Mr. Goronwy Roberts: I hope that when the B.Ed. degree has been firmly established it will prove possible to provide opportunities for qualified teachers to take part-time as well as full-time courses leading to its award.

Mr. Hastings: I thank the hon. Gentleman for that encouraging reply, but does he realise that many teachers with 10 years' or more experience, and with distinctions on their teaching certificates are very concerned about this, and that there is a strong case for the degrees to be awarded, at least in part, on merit and experience?

Mr. Roberts: I agree with the latter part of the hon. Gentleman's supplementary question. There is a case for teachers' experience being taken into consideration in part when the time comes to plan the extent and duration of these courses for this class of people.

Mr. Hamling: Is my hon. Friend aware that many serving teachers find it very difficult to get permission to take a B.Ed. degree?

Mr. Roberts: That remains to be seen. The arrangements are not yet in train. I hope that when the time comes local authorities and others will make it possible for suitable students from this sphere to proceed to part-time or full-time study for the degree.

Hooliganism and Vandalism

Mr. Iremonger: asked the Secretary of State for Education and Science what consideration is given in teacher training colleges in England and Wales to evolving techniques for remedial training of children in the lower streams of secondary schools who are at risk of becoming hooligans or vandals.

Mr. Goronwy Roberts: I do not think there is any simple answer to the problem the hon. Member has in mind, but colleges of education do discuss with their students the difficulties which some children can create for their schools and neighbourhoods and the individual needs and treatment of such children.

Mr. Iremonger: Since the Home Secretary's Advisory Council on the Penal

System now includes the prevention of crime in its terms of reference, will the Minister look again at his Answer and suggest to teacher training colleges that they might be a little more alert and enterprising in this?

Mr. Roberts: Many, if not all, colleges of education introduce discussions, seminars and visits by officials engaged in this work into their courses, and some of them have adopted youth clubs for practical study and service. As a Department, we have organised conferences and published a number of reports which have proved helpful to the colleges. I do not think that the hon. Gentleman is quite fair to the generality of colleges of education when he suggests that so little has been done in this respect.

Mr. Arnold Shaw: Does my hon. Friend agree that it would be more appropriate at this stage to deal with the whole question of streaming, which to a large extent is the cause of the state of affairs to which the hon. Gentleman referred?

Mr. Roberts: That is one of a number of considerations to be borne in mind in tackling this very important and difficult matter.

Arts Council Lectures (Literary Subjects)

Mr. Iremonger: asked the Secretary of State for Education and Science if he will circulate in the OFFICIAL REPORT the names of lecturers in literary subjects who have lectured for the Arts Council in England and Wales during the past 18 months, and state what fees were paid in each case, the number of people who attended each lecture or function, and the names of those on the panel responsible for arranging the engagement of the lecturers.

The Minister of State, Department of Education and Science (Miss Jennie Lee): I assume that the hon. Member is referring to poetry recitals. I am arranging for the necessary information to be circulated in the OFFICIAL REPORT.

Mr. Iremonger: I thank the right hon. Lady for that reply. But my Question referred to all lecturers on literary subjects; perhaps she could amend her Reply in that sense.

Miss Lee: I looked into this matter, but I found that it is only poetry recitals that

Recitals which have place in the past 18 months and attendances are as follows:—


Date of tour
Places visited
Attendance
Names of poets


March, 1966
…
…
Birmingham
…
…
65
Professor Edmund Blunden Vernon Scannell


Kettering
…
…
60


March, 1966
…
…
Alnwick
…
…
60
George Barkes Dom Moraes


Ashington
…
…
30


Durham
…
…
20


Guisborough
…
…
50


Hexham
…
…
45


South Shields
…
…
30


November, 1966
…
…
Dillington House
…
…
119
Vernon Watkins Hugo Williams


Exeter
…
…
48


Newton Abbott
…
…
40


Plymouth
…
…
73


St. Austell
…
…
55


Street
…
…
55


March, 1967
…
…
Alfreton
…
…
50
Patricia Beer Jon Stallworthy


Avoncroft
…
…
30


Kettering
…
…
35


Rugeley
…
…
25


Worcester
…
…
110


Each poet received a fee of ten guineas per recital. Poets are engaged by the Arts Council on the advice of its Literature Panel, which had about 20 members throughout the period with Mr. C. Day Lewis as Chairman.

Royal Opera House, Covent Garden

Mr. Carter-Jones: asked the Secretary of State for Education and Science if he will make it a condition of the financial support given from public funds to the Royal Opera House, Covent Garden, that tickets are fairly distributed; and if he will make it a condition that the authorities should inquire into the sources of tickets for performances which have been allegedly sold out.

Miss Jennie Lee: Where the demand for tickets exceeds the number of seats, problems inevitably arise. I have for some time back been discussing the whole matter with both the Arts Council and the Opera House and fully agree with my hon. Friend that not only must justice be done but be seen to be done.

Mr. Carter-Jones: I thank my right hon. Friend, but is she aware that people in the North feel that they are having a very raw deal in the allocation of tickets—and they assure me that they all pay their taxes.

Miss Lee: There has been a good deal of criticism about ticket agencies, but only 248 seats out of 2,158 are allocated through them. We are looking into the problem, which is difficult, and we do want fair play.
are being financed and promoted by the Arts Council.

Following is the information:

School Leaving Age

Mr. John Hall: asked the Secretary of State for Education and Science to what extent he estimates that, as a result of the decision to raise the school leaving age in 1970, it will be necessary to increase the percentage of the gross national product applied to education.

Mr. Crosland: By about 0·1 per cent. in 1970–71.

Mr. Hall: Is the Minister aware that that Answer is slightly different to the one he gave some time ago to a rather similar question? But bearing in mind the increased realism shown by this, is he satisfied that the increase will be adequate?

Mr. Crosland: I am not aware that the Answer differs from any previous Answer I have given on this subject. I think that this increase will prove adequate.

Mr. John Hall: asked the Secretary of State for Education and Science if he is satisfied that by 1970 there will be sufficient school accommodation and sufficient teachers properly qualified to teach pupils in the upper forms staying on for the additional year when the school leaving age is raised to 16 years.

Mr. Crosland: Yes, Sir.

Mr. Hall: Is the Minister aware that many members of the teaching profession believe that the accomodation available will be quite inadequate and that the number of teachers who have been properly trained to deal with the extra year's curriculum will also be inadequate to cope with the problem? Will he consult the teachers' organisations concerned?

Mr. Crosland: This is a matter which I have more than once discussed with all the main teachers' organisations. I think that I am familiar with their views. They have natural apprehensions on the subject, but I am satisfied that the amount we have made available for building—well over £100 million—in addition to our teacher supply programme will provide the necessary facilities.

Educational Cruises

Mr. Carter-Jones: asked the Secretary of State for Education and Science if he will introduce legislation to control the costs, reliability and standards of comfort on educational cruises; and if he will make a statement.

Mrs. Shirley Williams: No, Sir.

Mr. Carter-Jones: Is my hon. Friend aware that the charges for these cruises, which I admit are very desirable and a good form of education, sometimes impose very severe hardships on the parents? Would it not be possible to reduce the cost of the cruises, because they are normally fully taken up and the standard of accommodation is not as high as all that when compared with normal cruises and some of the administrative costs are borne by the teachers themselves in collecting the money?

Mrs. Williams: My hon. Friend's comments may be correct. But this is a matter to be settled between the local education authorities and the companies concerned. Some local education authorities assist parents with the costs of sending children on educational cruises.

Mr. Dalyell: Is my hon. Friend aware that many thousands of families are convinced of the educational, financial and safety value of these cruises?

Mrs. Williams: Yes. They have a very useful rôle to perform.

Mr. Marten: Is the hon. Lady aware that I have been on one of these cruises and that the criticisms made by the hon. Gentleman are absolutely wrong? Conditions are completely comfortable.

Independent Schools (Professional Associations)

Mr. Turton: asked the Secretary Of State for Education and Science what steps he takes, in order to carry out his functions under Part III of the Education Act, 1944, to inform himself of the reasons why professional associations of independent schools refuse to admit to membership particular headmasters or headmistresses.

Mrs. Shirley Williams: None, Sir. But my right hon. Friend is always ready to consider any relevant information given to him by any well-established association.

Mr. Turton: As associations carry out their own system of inspection into the running of schools by applicants asking for membership, is the hon. Lady aware that certain mistakes would have been avoided by her Department if there had been greater contact between her Department and those associations.

Mrs. Williams: We have our own system of inspection. The Question was basically about the membership of professional associations, which is not a matter in which we think it proper to interfere.

Educational Maintenance Allowances

Mr. Archer: asked the Secretary of State for Education and Science what would be the present-day equivalents of the maximum educational maintenance allowances recommended in the Weaver Report in 1957, adjusted proportionately with the increases in the allowances for children over 15 years of age in the National Assistance—supplementary benefit scales.

Mrs. Shirley Williams: Educational maintenance allowances are a matter for the discretion of local education authorities. I estimate that current equivalents would be about £107, £130 and £142 for ages 15, 16 and 17 as compared with £55, £65 and £75.

Mr. Archer: Is my hon. Friend aware that her arithmetic does not agree with mine? Can she tell us how many education authorities, if any, are paying the rates which she mentioned?

Mrs. Williams: I am not sure which of us has to teach the other. The latest available information relates to May, 1964, when the great majority of local education authorities were paying considerably more than the allowances laid down.

C.E.R.N. (New Accelerator)

Mr. Lubbock: asked the Secretary of State for Education and Science what is Her Majesty's Government's policy with regard to the proposed 300 GEV accelerator for C.E.R.N.

Mr. Crosland: On its present time table, the C.E.R.N. Council will reach decisions about the 300 GEV project in December. Her Majesty's Government will be fully ready then to take a policy decision in the light of the advice received from the S.R.C. and the C.S.P.

Mr. Lubbock: Is the Secretary of State aware that our attitude to this project, which has hitherto been thoroughly noncommittal, might be instrumental in persuading other nations to participate? Would not he agree that the consequences of failure to reach a conclusion on the project would lead to the wasteful proliferation of small national accelerators and a vast increase in the number of nuclear physicists emigrating to the United States?

Mr. Crosland: I take the hon. Gentleman's point, but I must make it clear that no Government have yet come to a firm decision on this project. It would be very difficult to do so until we are much clearer than we are about what may be proposed in terms of cost, location, the allocation of costs and many other factors.

Dr. Owen: Is my hon. Friend aware that, while no British Government may have come to a firm conclusion, the French Government have welcomed the proposal, and there is a danger that the British Government may be seen to be dragging its feet once more in European collaboration in science?

Mr. Crosland: I do not think that that is a view which could be or is taken any-

where in Europe. Apart from anything else, the opposite is demonstrated by the attention which we are giving to investigating a possible site for this accelerator.

Mr. Hogg: I recognise the great importance of this project, but could the right hon. Gentleman give us some idea of the cost bracket which is contemplated for this machine? The C.E.R.N. consortium may shortly prove not sufficiently wide to bear the increasing cost of accelerators.

Mr. Crosland: I should not like to give a definite figure, but the cost is very high indeed. What the right hon. and learned Gentleman said in the second part of his supplementary question is relevant, but until we have more definite proposals from the C.E.R.N. Council the Government would be very foolish and imprudent to come to a definite decision.

Sir H. Legge-Bourke: asked the Secretary of State for Education and Science whether he will make a statement about the possibility of siting in East Anglia the proposed new accelerator planned by C.E.R.N.

Mr. Crosland: This possibility depends on decisions due to be taken by the Council of C.E.R.N. in December. The site in East Anglia offered by Her Majesty's Government is still under consideration, together with eight sites in other countries.

Sir H. Legge-Bourke: While I realise that much must depend on the decisions in December, may I ask the right hon. Gentleman whether the Science Research Council is working closely with the Regional Economic Planning Council to make sure that the necessary facilities would be available were this site to be chosen?

Mr. Crosland: I should like to look into the point about the Regional Economic Planning Council and write to the hon. Gentleman. But the Science Research Council, in co-operation with a number of other bodies, is doing a great deal of work on the possibilities of this site.

Mr. Hogg: Will the right hon. Gentleman bear in mind that, as we are certainly the third scientific Power of the world, we have not so far had our fair share in the allocation of sites for international research bodies? Will he constantly press


the view that our co-operation must depend to some extent on having a fair crack of the whip?

Mr. Crosland: I would agree with the right hon. Gentleman. This is one of the reasons why, until we know the decision about a site, and other factors, we cannot take a final view on the project.
In answer to a previous Question, I have discovered that the approximate cost on present calculations of the whole project is something over £200 million.

National Youth Orchestra

Dame Irene Ward: asked the Secretary of State for Education and Science what has been done recently to maintain the National Youth Orchestra.

Miss Jennie Lee: The Arts Council is making the Orchestra a grant of £20,000 in the current financial year.

Dame Irene Ward: I thank the right hon. Lady for that information. Is she satisfied that this will keep the National Youth Orchestra in full being in view of the fact that it is so important to the musical future of the country?

Miss Lee: I am entirely satisfied. I much appreciate the hon. Lady's interest in this orchestra.

University Clinical Staff (Salaries)

Dr. Winstanley: asked the Secretary of State for Education and Science if he will state the date and manner of implementation of the revised salary scales for clinical, medical and dental teaching staff.

Mr. Goronwy Roberts: The revised salary scales for university clinical staff, which are effective from 1st October, 1966, will be put into payment immediately after the period of severe restraint, which ends on 30th June, 1967.

Dr. Winstanley: I am grateful for that statement. However, is the Minister aware that doubt as to the method of payment still exists among the people concerned, and will he make clear whether it is to be paid in instalments, as mentioned by his right hon. Friend, or in a lump sum?

Mr. Roberts: Payment will be made without being phased or paid in instalments. It will be in a lump sum.

Amateur Athletics

Mr. Boston: asked the Secretary of State for Education and Science if he is aware of the difficulties of financing amateur athletics in this country what is the extent of Government assistance at present available to the Amateur Athletic Association and whether he will give special assistance to help them face their present crisis.

Mr. Crosland: Yes, Sir. Government assistance to the Amateur Athletic Association is at the rate of £26,000 per annum. I am offering in addition a special grant of £5,000 this year to meet the grave financial situation facing the Association. The Byers Committee are examining the long term difficulties of athletics and this additional grant is subject to the agreement we have reached with the A.A.A. that they will consider the implementation of its recommendations in consultation with my Department.

Mr. Boston: That is very welcome news. But is my right hon. Friend satisfied that the Association is administratively capable of making the most effective use of this extra money? Can he say whether it is hoped that the Byers Committee will come up with some long-term proposals for a new financial structure for athletics?

Mr. Crosland: I am satisfied that the Association is able to make use of the grant to which I have referred. As to the longer term, I would hope that the Byers Committee will come up with a very thorough report examining all the matters to which my hon. Friend referred.

Textbooks

Mr. Goodhart: asked the Secretary of State for Education and Science what action he is taking to revise and improve the system of collecting statistics on the provision of textbooks in schools.

Mrs. Shirley Williams: The Department first collected information about expenditure on library and textbooks for the financial year 1964–65. We are keeping the arrangements under review.

Mr. Goodhart: May I remind the hon. Lady that in the Easter Adjournment


debates she said that she hoped the Department would be improving the provision of statistics on this important branch of education?

Mrs. Williams: I would point out that prior to 1964–65 the Department collected no statistics. We must give some opportunity to see how the system is working.

Badminton

Mr. Goodhart: asked the Secretary of State for Education and Science what action he is taking to provide additional facilities in public buildings for badminton clubs, in view of the shortage of facilities for badminton in many areas following the closure of the Territorial Army drill halls.

Mr. Goronwy Roberts: The Regional Sports Council is concerned to secure the fullest possible use of all existing facilities suitable to sport. In addition it has made a special survey of surplus drill halls and is drawing the attention of local authorities to those suitable for purchase as multi-purpose sports centres.

Mr. Goodhart: As the Government are responsible for the policy of closing drill halls, will the Department now issue a circular to local education authorities suggesting that wherever possible they make school halls available to badminton clubs to meet the serious shortage in many areas?

Mr. Roberts: Action of that order has been taken, but I will look into the possibility of drawing to the attention of local authorities what the hon. Member has said.

Oral Answers to Questions — DEFENCE POLICY (MILITARY RESOURCES)

Mr. Marten: asked the Prime Minister if he is satisfied that Great Britain has the civil and military resources to maintain the Government's policy of a world-wide defence rôle; and if he will make a statement.

The Prime Minister (Mr. Harold Wilson): The Government's views on these matters have been reported to the House on a number of occasions and I

have as yet no further statement to make.

Mr. Marten: Would the Prime Minister say whether the Government's policy is to decide on the level of forces first and then fit our world obligations into that, or to decide, as he should, on our world obligations first and then fit our forces to suit that?

The Prime Minister: I think the hon. Gentleman will probably wish to wait until we are in a position to make a statement. As he knows, we are in the course of discussing this very important question, both force levels and commitments, with the Prime Minister of Australia, and I think it would be better to wait until those and similar talks are over.

Mr. Rose: In view of our military impotence in the recent crisis in the Middle East and Rhodesia, would not my right hon. Friend agree that it is high time we dropped this expensive fiction of a world rôle and concentrated on the transition into the economies of those countries which will be affected?

The Prime Minister: I cannot accept my hon. Friend's opening premise. In Rhodesia, as has been frequently said, we considered that the use of military force would have been the wrong way of dealing with the situation that arose. In the Middle East we were not at war.

Mr. Longden: Why is it that the rest of the free world appears to think it is normal practice to leave it to the United States and the United Kingdom to police the rest of the world outside the North Atlantic Treaty territories? Cannot Her Majesty's Government make more effective efforts to bring home their responsibilities to our Continental allies?

The Prime Minister: There is good point in the last few words, but I do not think the rest of the world harbours the views attributed to it by the hon. Gentleman. We have Commonwealth commitments as well as those others which he has in mind.

Mr. Mayhew: When the Prime Minister considers the future level of defence expenditure, will he bear in mind his statement that one of the functions of our military presence in the Far


East in the 1970s and 1980s will be to prevent an eye-ball to eye-ball confrontation of Communist China and the United States of America? Will provision for that task be made in the Service Estimates?

The Prime Minister: This is part of our general policy, as was explained in my hon. Friend's hearing last June. I do not think it is a matter that can be quantified in Service Estimates.

Sir Alec Douglas-Home: Would the right hon. Gentleman recollect that we have been waiting for some time for a statement on the Government's intentions in the Far East? He has talked to President Johnson and he is now talking to the Prime Minister of Australia. Would not this be the right time, after finishing talks with the Prime Minister of Australia, to make a statement?

The Prime Minister: I am sure that the right hon. Gentleman, who occupied the high office of Secretary of State for Commonwealth Relations, would agree that it is also important to talk to the Prime Minister of Malaysia, who is coming later this month, and the Prime Minister of Singapore.

Mr. Rankin: Would my right hon. Friend make clear that the Government had no intention of pursuing a worldwide rôle, and, indeed, are prepared to restrict it east of Suez?

The Prime Minister: I have made clear on a number of occasions that the commitments which we enter into and our ability to meet them will be limited to what is economically feasible in terms of the monetary and real resources of this country. This is the task we are engaged on. I think we must be allowed time to complete discussions with our allies and Commonwealth partners concerned.

Mr. Sandys: Since future developments in the Far East are unpredictable, can the Prime Minister assure us that it is not his intention to announce a decision to close the Singapore base after a number of years irrespective of the situation that may exist at that time?

The Prime Minister: The right hon. Gentleman had better await my statement in the House. He has now learned the doctrine of unpredictability. It is a

pity that he did not believe it when making some of the obligations with which he got us tied up when he was in Government.

Oral Answers to Questions — EUROPEAN ECONOMIC COMMUNITY

Mr. G. Campbell: asked the Prime Minister if he will make a statement on the start of negotiations for entry into the European Economic Community.

The Prime Minister: I have nothing to add to the Answer given by my right hon. Friend the Foreign Secretary on 1st June to a Question by my hon. Friend the Member for Croydon, South (Mr. Winnick).—[Vol. 747, c. 251.]

Mr. Campbell: Are the Government making full use of the present period in preparations, with a view to obtaining all the information which will be needed? In particular, is there yet the extra agricultural staff in our Mission in Brussels which the Select Committee on Agriculture found to have been applied for more than six months ago?

The Prime Minister: I think we are in a position to say that we are getting all the information required. I will not comment on the activities of the Select Committee at this time. I think that another time would be more appropriate for that. We are getting all the information required, and of course, my right hon. Friend the Foreign Secretary was in a position to discuss this question with a number of Foreign Secretaries of Community countries when he was in Luxembourg this week.

Mr. Godber: If the Prime Minister does not wish to comment on what the Select Committee said, will he not admit that in fact the staff has not been augmented in the way recommended by the Select Committee? If his right hon. Friend the Minister of Agriculture is not prepared to do so, will the Prime Minister take steps to see that our staff is adequately augmented so that we know what is going on on the agricultural side?

The Prime Minister: I shall be glad to discuss this with my right hon. Friend. I am always deeply touched when I hear right hon. Gentlemen opposite asking for an increase in the Civil Service.

Oral Answers to Questions — UNDER-DEVELOPED COUNTRIES

Mr. Whitaker: asked the Prime Minister whether he will make it an aim of Government policy to spend at least as much on aid to under-developed countries as on arms.

The Prime Minister: The Government's policies on aid and defence are already well known, Sir, and I have no change to announce today.

Mr. Whitaker: Would not my right hon. Friend agree that this would be a more effective way of preventing the spread of Communism, and would he not agree, as he wrote in his excellent book "The war on world poverty", that the principal threats to world peace in future are likely to come from the increasing gap between the rich and the poor countries?

The Prime Minister: Certainly that is one of the major causes of unrest and subversion and of threats to peace in many parts of the world. In fact, in real terms the defence programme has already been cut by about one-third compared with the level at which it was running when that book was written.

Mr. Walters: Is the Prime Minister aware how much our friends in Europe deplore the fact that as well as going to Washington to discuss the crisis in the Middle East the Prime Minister did not make some attempt to discuss it with European statesmen?

The Prime Minister: I am sorry if the hon. Gentleman thinks that the President of France is not a European statesman, because I will be discussing this with him next week. In addition, my right hon. Friend the Foreign Secretary discussed this matter at some length in Luxembourg with a wide number of European statesmen, Foreign Ministers and others, during his visit this week. I hope that the hon. Gentleman is not suggesting that I should personally visit every European country.

Oral Answers to Questions — RHODESIA

Mr. Evelyn King: asked the Prime Minister if he has been in correspondence with Mr. Ian Smith since the conference

on H.M.S. "Tiger" and if he will make a statement.

Mr. Winnick: asked the Prime Minister what correspondence he has had with Mr. Ian Smith since the meeting on the "Tiger"; and if he will make a statement on Rhodesia.

Sir Knox Cunningham: asked the Prime Minister what steps he now intends to take to solve the Rhodesia constitutional crisis.

The Prime Minister: I would refer hon. Members to my Answers to Questions on 6th and 13th June.—[Vol. 747, c. 785; Vol. 748, c. 305.]

Mr. King: Will the Prime Minister accept that if in any future correspondence which he may have with Mr. Smith he continues to exist upon "Nibmar", failure is certain and that responsibility for that failure will rest with him and the extremists who sit behind him?

The Prime Minister: The hon. Gentleman's question makes me recall that in my composite reply I did not answer one of the points in his Question. I have had no correspondence whatever with Mr. Smith since the conference on H.M.S. "Tiger" and have no plans for any correspondence with him at the present time.

Mr. Winnick: What feelers did Mr. Smith put out to get talks starting again, in view of the difficult problems which he is facing with tobacco production? Will my right hon. Friend consider the possibility of publishing a White Paper listing the activities of hon. Members opposite who have had treasonable activities and links with the Smith régime—

Mr. Speaker: Order.

Hon. Members: Withdraw.

Mr. Speaker: Order. The hon. Member must withdraw that remark at once.

Mr. Winnick: I was trying—

Hon. Members: Withdraw.

Mr. Speaker: I asked the hon. Member to withdraw his remark. He must withdraw it.

Mr. Winnick: I withdraw.

Several Hon. Members: rose—

The Prime Minister: On a point of order. My hon. Friend withdrew the remark which you asked him to withdraw, Mr. Speaker. However, there were earlier parts of his Question concerned with feelers from Mr. Smith. Would I be in order replying to them?

Mr. Speaker: Yes.

The Prime Minister: I have had no direct messages from Mr. Smith, feelers in the sense used by my hon. Friend, but in the week since I told the House that there was no sign that he was interested in any discussions, certain signs have become visible, including, of course, the television programme of last week.

Sir Knox Cunningham: Is the Prime Minister aware that many people who have read the British and Rhodesian Blue Books are appalled by his bullying behaviour and think that he should be ashamed of himself?

The Prime Minister: Hon. Members who have read the truth about what happened on H.M.S. "Tiger" in the British Government's Blue Book and who have also read the Rhodesian account of the same thing will know that we went to the limit—and many hon. Members would say beyond the limit—in trying to reach an honourable settlement which could have resulted in independence for Rhodesia by this time—by the spring of this year—if the undertakings necessary had been carried out and the six principles had been fully honoured. There was no question of bullying. Whereas we insisted on a more representative Government, the decision to sack his extremist Fascist colleagues was Mr. Smith's own and an offer by him, not a demand by us.

Mr. Woodburn: Is my right hon. Friend aware that most people will be satisfied that he has taken the opportunity to send someone to Rhodesia to check up on all the statements about the willingness of Mr. Smith to accept reasonable terms, and that the choice of Lord Alport makes it impossible for anyone to impute that he has chosen any kind of representative of himself, when it is clear that he has chosen someone whose opinions will obviously be accepted not only by

hon. Members opposite but, I hope, by the whole country?

The Prime Minister: Whatever evidence there may be to the contrary, I have never myself been in much doubt that Mr. Smith would like to see an honourable settlement. One of the things which we have to be satisfied about is not whether he wants one but whether he will be allowed to have one.

Mr. Thorpe: As the Constitution negotiated by the right hon. Member for Kinross and West Perthshire (Sir Alec Douglas-Home) and the right hon. Member for Streatham (Mr. Sandys) was unilaterally torn up by Mr. Smith, the 1961 Constitution, and as he made it plain on "Tiger" that if he failed to get a referendum in his favour he would do a second U.D.I., does not the Prime Minister agree that the only guarantee which we have to preclude the dishonouring of further pledges is to stick to "Nibmar"?

The Prime Minister: We made it quite clear what would be the position if there were a second U.D.I., if, for example, the Rhodesians were willing to return to the 1961 Constitution while the fifth principle was being tested. We made it clear that some of the assurances which we had given in the past could no longer be counted on in that circumstance. As for "Nibmar", I have nothing to add to what I told the House two days ago.

Mr. John Lee: Is it not now time to have a fixed timetable for the completion of the overthrow of the illegal régime by sanctions?

The Prime Minister: I notice that those on both sides of the House who were saying that sanctions would not work, would break down, would be a total failure, are very quiet today in view of the announcement in Rhodesia this week. How far that has affected the new apparent willingness to have talks, I do not know.

Sir S. McAdden: In fairness to his hon. Friends, will the Prime Minister be good enough to confirm that there are men of integrity and probity in his party who are acceptable to hon. Members on both sides of the House as representatives to talk to Rhodesia and that the justification for picking Lord Alport was not that he was the only one acceptable?

The Prime Minister: There was no suggestion that Lord Alport was the only one acceptable. I would have thought that he was acceptable to hon. Members opposite, for he was a member of their Administration and he was a very distinguished High Commissioner in that part of the world. But, of course, it is true that there are many hon. Members, as there are those in another place and outside both Houses, who could have been chosen for this mission. We chose Lord Alport.

Oral Answers to Questions — COMMONWEALTH PRIME MINISTERS' CONFERENCE

Mr. Cordle: asked the Prime Minister what discussions he has had with Commonwealth Prime Ministers about this year's Commonwealth Prime Ministers' Conference.

The Prime Minister: There is no convention of annual meetings, Sir. As to the next meeting, I would refer the hon. Member to the Answer I gave on 4th May to a Question by the hon. and learned Member for Antrim, South (Sir Knox Cunningham).—[Vol. 746, c. 112.]

Mr. Cordle: In view of events in Africa and the Common Market and our somewhat ambiguous east of Suez policy, does the Prime Minister not agree that the conference should be held sooner rather than later?

The Prime Minister: I see no pressing need for such a conference. We had quite a fascinating one last September and I do not think there is any hurry to have another at this moment—the words are still ringing in my ears. On the Common Market we are in close touch with all the countries concerned, and on a Ministerial basis with those principally concerned. As for east of Suez, and other defence policies, I have explained the discussions that we are having with leading Commonwealth Prime Ministers.

Mr. E. L. Mallalieu: Will my right hon. Friend bear in mind the desirability and feasibility, when the next conference takes place, of the Commonwealth taking a lead towards the establishment of a real system of peace-keeping in the world?

The Prime Minister: Yes, I would very much like to see a greater contribution by some Commonwealth countries, some of the newer Commonwealth countries, particularly in the matter of responsibility for peace-keeping. When I suggested at the beginning of the last conference that the length of speeches should he in proportion to what each country was doing to help Zambia, I had in mind one of my colleagues whose speeches might have been a bit shorter. He is no longer a Prime Minister.

SUEZ CANAL (DETAINED BRITISH SHIPS)

Mr. Bessell: (by Private Notice) asked the Secretary of State for Foreign Affairs if he will make a statement about British subjects on board the four ships held in the Suez Canal and what provision is being made to ensure their safety.

The Under-Secretary of State for Foreign Affairs (Mr. William Rodgers): Four British ships are detained in the Great Bitter Lake together with several ships of other nationalities. There are 261 passengers and crew on board, of whom 202 are known to be British.
I have seen reports in the Press that the United Arab Republic Foreign Minister has said that the canal will remain closed so long as the Israelis are on the east bank.
The head of the United Arab Republic Interests Section in London has been summoned to the Foreign Office and told that it is intolerable that our ships should be detained in this way. We are working together with other Governments concerned and plans are being prepared for evacuation.
Meanwhile, the Canadian Ambassador in Cairo, who looks after British interests in the United Arab Republic, has told us that the passengers and crew on board are well. He is arranging for consular officers of the Canadian Embassy and the British Interests Section to make contact with the ships.
The shipping agents have told us that steps have been taken to provide the ships with food supplies.

Mr. Bessell: While thanking the hon. Gentleman for that statement, which I am sure will be appreciated on both sides


of the House, may I ask him whether the Red Cross has been invited to assist in the evacuation of these British subjects, and whether he is quite satisfied that there is no possible danger to the passengers in the present situation?

Mr. Rodgers: Is it impossible to give a categoric answer to the second question, but to the best of our information, the people involved are as well as can be expected, and we see no immediate danger to them.
We have obviously to try to find the best means by which evacuation can be accomplished, if it has to be done. On these occasions, sometimes the more dramatic course is not necessarily the one which will ensure the safety of the people involved.

Sir Alec Douglas-Home: Has not Egypt accepted the jurisdiction of the International Court in this matter? Therefore, is it not open to Her Majesty's Government, and other Governments affected, to apply for an injunction which would compel Egypt to open the canal?

Mr. Rodgers: The question of opening the canal is somewhat larger than this specific question relating to British subjects. What I can say to the right hon. Gentleman is that this is precisely the sort of matter to which we are now trying to find a clear answer.

Mr. Paget: If the Egyptians insist upon defying international law in these matters, is there not a case for asking our Israeli friends to step over on to the opposite shore?

Mr. Biggs-Davison: Can we have an assurance from the Government that their policy with their allies, and other friendly nations, is to secure on a permanent basis the freedom of navigation in this international waterway, according to the Constantinople Convention and the resolutions of the United Nations?

Mr. Rodgers: That supplementary question goes a great deal wider than the original Question. What we are primarily concerned with at the moment is the safety of the British subjects involved.

Mr. Sandys: Will not the Minister say a little more about opening the canal, and not merely confine himself to the question of the evacuation of British sub-

jects? If he is not able to make a statement himself, will he promise us that a statement will be made by the Government, at the first possible moment, about what action is being taken to reopen the canal?

Mr. Rodgers: I can certainly give an undertaking on the larger question that we shall make a statement as soon as we are in a position to say something which will be useful to the House. I do not think that we can possibly make a statement earlier than the moment at which we have something helpful to say to the House. I thought that I was saying "Yes" to the right hon. Gentleman's request.

Mr. Molloy: Will my hon. Friend give the House an assurance that he will not embark on any disastrous policy in this matter, such as was followed by the right hon. Gentleman the Member for Streatham (Mr. Sandys)?

Mr. Rodgers: The assurance which I have given, and will give again, is that we shall do all that we possibly can to ensure the safety of this group of British subjects, stranded in difficult circumstances.

Mr. Thorpe: Can the Minister say whether his information is that the canal is blocked by the presence of such ships as alleged or merely by political reasons?

Mr. Rodgers: It is not possible to know precisely why it is blocked at present. [An HON. MEMBER: "Why not?"] The information available to the House is the same as the information available to the Government on this point.
As I said in my original statement, we have, irrespective of what the original cause may be for the moment, the remark which has been made by the U.A.R. Foreign Minister, that the canal will remain closed as long as Israelis are on the east bank.

Lord Balniel: Surely it is possible at this time, and not at some indefinite time in the future, to confirm that the 1951 resolution imposes an obligation upon the Security Council to keep international waterways open?

Mr. Rodgers: Whatever the obligations, our immediate purpose must be twofold. First, and this was the burden


of the Question asked, how can we best help the 202 British subjects who are stranded? I hope that nothing will be said this afternoon in the House which will in any way make it more difficult to help.

Mr. Maxwell: Can my hon. Friend say what are the nationalities of the other ships which are locked in the canal, and what Governments are they with whom he is having consultations about the possibility of getting the passengers and the ships released?

Mr. Rodgers: I cannot tell my hon. Friend immediately the nationalities of the other ships. [An HON. MEMBER: "Why not?"] As I have made clear, we are, in particular, in consultation with the Canadian Government, because of their special responsibility for British interests in this matter. We shall, of course, consult and act with every Government which can help to solve this problem.

Several Hon. Members: rose—

Mr. Speaker: Order. Mr. Heath. Business Question.

BUSINESS OF THE HOUSE

Mr. Heath: May I ask the Leader of the House to state the business of the House for next week?

The Lord President of the Council and Leader of the House of Commons (Mr. Richard Crossman): Yes, Sir. The business for next week will be as follows:
MONDAY, 19TH JUNE—In the morning—
Adjourned Second Reading debate the Bermuda Constitution Bill.
Second Reading of the Public Works Loans (No. 2) Bill.
In the afternoon—
Debate on Aden on a Motion for the Adjournment of the House.
Second Reading of the Aden, Perim and Kuria Muria Islands Bill.
Adjourned debate on the Gas (Borrowing Powers) Order.
Resumed debate on the Second Reading of the Anchors and Chain Cables Bill.
TUESDAY, 20TH JUNE—Remaining stages of the Leasehold Reform Bill.
WEDNESDAY, 21ST JUNE—In the morning—
Motions on the Agricultural Investment (Variation of Rate of Grant) Order, the Calf Subsidies (United Kingdom) (Amendment) Scheme, and on the Agriculture (Tractor Cabs) Regulations.
Lords Amendments to the Marine &c., Broadcasting (Offences) Bill.
In the afternoon—
Committee stage of the Finance (No. 2) Bill, which it is hoped to complete in time to allow consideration of the remaining stages of the Decimal Currency Bill.
THURSDAY, 22ND JUNE—Debate on a Government Motion on the White Paper on the D Notice System (Cmnd. 3312).
Motion on the Iron Casting Industry (Scientific Research Levy) Order.
FRIDAY, 23RD JUNE—Remaining stages of the Sexual Offences (No. 2) Bill and of the Criminal Law Bill [Lords.]
MONDAY, 26TH JUNE—The proposed business will be:
In the morning—
Second Reading of the Public Records Bill [Lords.]
Second Reading of the Advertisements (Hire Purchase) Bill [Lords] and of the Legal Aid (Scotland) Bill [Lords], which are consolidation Measures.
Remaining stages of the Bermuda Constitution Bill.
In the afternoon—
Supply [21st Allotted Day].
A debate will take place on a topic of to be announced later.
At seven o'clock, as the House is aware, the Chairman of Ways and Means has set down opposed Private Business for consideration.

Mr. Heath: Am I right in thinking that it is still the intention of the Foreign Secretary to make a statement about Government policy on Aden on Monday?

Mr. Crossman: Yes, Sir.

Mr. Heath: I am glad to have that confirmation. But what is the objection to taking the remainder of the Committee


stage of the Finance Bill after the Foreign Secretary's statement on Monday and having the debate on Aden on Wednesday?

Mr. Crossman: I am aware that the Opposition have been pressing for a charge, but, on balance, I think that we have to take into account, on a subject such as Aden, the considerations of the Foreign Secretary as well. His preference is strongly for presenting the whole of what he has to say on Monday, and not, as was previously suggested, for debating this matter on the Second Reading of the Aden Bill, but on a Motion for the Adjournment. I would have thought that to be a satisfactory course to both sides of the House.

Mr. Heath: Is the right hon. Gentleman aware that the preference of the Foreign Secretary for not giving proper time to the House for consideration of his statement is not sufficient reason to hold an immediate debate on it? Of course, in some circumstances it is inescapable that a Minister must make a declaration of policy in a debate. But I remind the right hon. Gentleman that the Prime Minister made a statement on our application to join the European Economic Community and that the debate followed two days later. The right hon. Gentleman has given no reason for not taking that course on this occasion. Will he, therefore, change the business?

Mr. Crossman: I am prepared to talk to my right hon. Friend the Foreign Secretary, but this has been discussed through the usual channels and my right hon. Friend did say that he would be prepared, naturally, if this was desired by the spokesman for the Opposition, to see that the basis of his statement was made available on Friday to the Opposition spokesman. [HON. MEMBERS: "No."] It is by no means abnormal for statements to be made at the beginning of the day on which the subject is being debated.

Mr. Heath: I could not quite hear what the right hon. Gentleman said about the Opposition spokesman.

Mr. Crossman: I said that if the spokesman of the Opposition wished—and this point was put through the usual channels—my right hon. Friend would, if possible, give the substance of his statement in advance to that spokesman. [HON. MEM-

BERS: "No."] The House will get the statement at the same time as the Leader of the Opposition.

Mr. Heath: I express our gratitude to the right hon. Gentleman for the fact that our Front Bench spokesman can have the statement in advance. But if it can be made available in advance to us, why not to the House?

Mr. Crossman: I said that, as far as possible, the substance of the statement will be made available to the Opposition spokesman. It is clear that the statement will be finalised over the weekend, and, therefore, the issue, as the right hon. Gentleman rightly said, is whether we should have the statement on Monday followed by the debate or whether we should have the debate on Wednesday instead. I pointed out that it is perfectly normal for a statement to be made at the beginning of the day on which a debate on the subject is to take place.

Mr. Hector Hughes: Will my right hon. Friend at long last find time for a debate on my Motion No. 510 about restoring to British seamen the facilities to visit their wives and families when they return from the sea?

[That this House is of opinion that for social, family, economic and other reasons the withdrawal by British Railways of the cheap fare railway vouchers hitherto available to seamen and their families is wrong as it frustrates family re-unions, deprives British Railways of fares, diminishes British Railways income and now calls upon Mr. Chancellor of the Exchequer and the Minister of Transport, by legislation or otherwise, to restore to British seamen and their families the relevant facilities which they have hitherto enjoyed.]

Mr. Crossman: If my hon. and learned Friend looks again at the business for next week, he will see that, despite the sympathy I have for his Motion, it is doubtful whether it can be squeezed in. I would again advise him to try to use his opportunities as a private Member to obtain time for a debate.

Dame Irene Ward: If, next week, we are to revert on Mondays and Wednesdays to sitting till 10 o'clock, will the right hon. Gentleman tell us why he has decided to abandon the adolescent sleeping at 9.30 p.m.?

Mr. Crossman: We have discussed this on business questions on two previous occasions and I got the impression that one of the improvements in our arrangements for morning sittings which were almost universally agreed was that we should revert to ancient practice in this regard. We accordingly put down a Motion and were relieved to find that no one opposed it.

Mr. Orme: Will my right hon. Friend accept that many of us on this side of the House see no reason why the procedure for Monday's debate should be altered in any shape or form? If information about the Foreign Secretary's Statement is to be given privately to the Opposition, why cannot it be given to the Government back benches as well?

Mr. Crossman: It was because I got the strong feeling that the back benchers on both sides would prefer it this way that it is this way.

Mr. Peyton: As a very large number of hon. Members may wish to comment on the predictability of the Prime Minister's conduct on the D Notice question, will the right hon. Gentleman consider extending the time for Thursday's debate by one hour?

Mr. Crossman: I am sure that we are all looking forward with keen anticipation to the debate. I will discuss the hon. Member's suggestion through the usual channels, but I have a suspicion that, on Thursdays, Members like to feel that the debate ends and the vote is taken at 10 o'clock.

Mr. Boston: In view of the fact that the Sunday Citizen is to close down on Sunday, does not my right hon. Friend feel that there is an urgent need for another debate on the Press? Does he recall that, on 7th March, the Prime Minister said that if a newspaper was in danger of closing down, and either the industry or the newspaper concerned were to approach the Government, the Government would see whether help could be given whilst maintaining the essential safeguards? Is not a debate necessary, either in the House or outside?

Mr. Crossman: I think that the situation in the industry is still unstable, although I must say that, when we held the debate, it was interesting to note how rela-

tively few hon. Members took part. I do not think that there is much to be gained by a debate now. I think that there is more in what my hon. Friend said about further research outside the House.

Mr. Sandys: Does not the right hon. Gentleman realise that, as Leader of the House, he has duties not only to the Foreign Secretary but to the House as a whole? Does not he think it disrespectful to the House and undignified for it to be asked to debate what the Foreign Secretary has described as a wide-ranging statement covering many different issues without giving hon. Members proper time to consider these important matters? Is it not a fact that the Leader of the House has been put in a fix by what the Foreign Secretary said the other day and that he does not like to let him down?

Mr. Crossman: No, Sir, that is not the case. Of course, a Leader of the House must carefully consider the views of the House and it is clear, apart from what my right hon. Friend has said, that the House prefers the course we propose. I remind the right hon. Gentleman that majorities have their rights as well as minorities.

Mr. Kelley: If my right hon. Friend's attention has not been too diverted from Motion No. 575 by other matters which he may consider of greater importance, may I ask when time will be provided for it? We have before us a certain amount of evidence that requires the House to review the question of a national energy policy. May we have some understanding that time will be provided?

[That this House earnestly requests Her Majesty's Government, when formulating its energy policy, to recognise that while the cheapest form of energy for the nation is essential, they should also take into account the social problems and increasing unemployment in the mining areas that too rapid a rundown of the industry would produce; points out that marginal gains resulting from cheaper energy could be outweighed by the cost to the economy of maintaining a growing number of unemployed workpeople and their dependants in the development areas, of which the coalfields are such an important part; and furthermore, in the light of the recent disclosures by the National


Fuel Efficiency Study Group of the enormous Government subsidies given to the nuclear power stations, demands a re-appraisal of the whole fuel policy of this country in the interest of the nation.]

Mr. Crossman: I am grateful to my hon. Friend for raising this matter. I have talked to my right hon. Friend the Minister of Power and he hopes to report to the House his conclusions on the current fuel policy review before the Summer Recess.

Mr. Hastings: Can the right hon. Gentleman ensure that, as soon as Lord Alport returns from Salisbury, and regardless of what is recommended, there will be a full debate in the House in Government time?

Mr. Crossman: No, I think that we had better wait until he comes back to see whether there is any need for a debate.

Mr. William Hamilton: Is my right hon. Friend aware that the vast majority of hon. Members are completely satisfied with the statement which he has made this afternoon?
Secondly, may we know whether the Government will provide extra time for the completion of the Medical Termination of Pregnancy Bill?

Mr. Crossman: I thank my hon. Friend for his first remark. As for the second part of his question, I cannot make any statement on it this week.

Rear-Admiral Morgan Giles: Can the Leader of the House make arrangements for a definite statement to be made about whether the Suez Canal is blocked? Is it not fantastic for the House to be told that the Government do not know?

Mr. Crossman: I listened to the exchanges during the Private Notice Question. My right hon. Friend the Foreign Secretary regrets that he is unable to be here this afternoon. I will pass on to him the request for information, which will be given as soon as it is available.

Mr. Molloy: May I draw my right hon. Friend's attention to early Motion No. 518, concerning British Servicemen in the Sachsenshausen Concentration Camp? I understand that the matter is to be referred to the Parliamentary Commissioner, but irrespective of his findings

would my right hon. Friend arrange for it to be debated in the House?

[That this House calls upon the Foreign Secretary to appoint an independent person to investigate the treatment of former British inmates of Sachsenshausen Concentration Camp, civilian and military, who have been refused compensation under the agreement between Her Majesty's Government and the Federal Republic of Germany, signed on the 7th June, 1964, with power to recommend the award of ex-gratia payments in appropriate cases.]

Mr. Crossman: I am delighted that the decision has been taken to have an investigation of this difficult case by the Parliamentary Commission. I am sure that it is a right decision. Since it has aroused widespread interest, it seems clear that it would be proper for me to give the assurance that, whatever the Commissioner recommends, we should consider his recommendation and the situation arising under it. I can give that assurance. I will find time for a debate when we have heard what he has to say.

Sir Ian Orr-Ewing: Do the Government intend to publish a new White Paper on defence, or has that now been abondoned in view of the turmoil in many parts of the world? If it is coming forward, may we have an asurance that it will not be produced in the law few days before the Summer Recess, because any matters put forward in it will need consideration and debate?

Mr. Crossman: Whether there is to be a statement or White Paper, there will be an important statement on defence towards the end of next month—[HON. MEMBERS: "Oh."] On defence, towards the end of July. I am not able to say exactly when it will take place, but I will bear in mind the strong feeling of hon. Members that, if they have an important statement, they like to discuss it as well.

Mr. Pavitt: May I remind my right hon. Friend that in this longer than usual Session we have not yet discussed the National Health Service? May we have such a debate before the Summer Recess?

Mr. Crossman: I would have thought it unlikely, in view of the other subjects


which we have to debate. However, that subject can come on the agenda.

Mr. Biggs-Davison: Is it not desirable that we should have a thoroughly informed debate on Aden? Despite what has been said, and the heat which has been generated, is it not possible for the Leader of the House to make an exchange of business between Monday and Wednesday and so meet the wishes on this side of the House as well as those of some of his right hon. and hon. Friends?

Mr. Crossman: The House is divided in its opinion. However, I think that the decision is clear, and that we will have the debate on Monday.

Mr. Abse: Does the Leader of the House recall that, last November, the Law Commissioners published a Report on Divorce in which they specifically invited the House to express its views on the various options available? As the Report has been discussed in the House of Lords, and there are disturbing reports that outside bodies are conducting talks with the Law Commissioners, would it not be more respectful to the House if we had an opportunity of discussing these matters and so give the respect to the Law Commissioner's Report which it obviously deserves?

Mr. Crossman: I share my hon. Friend's interest and his regard for the importance of this subject. The Government are actively considering the best way in which this Report can be dealt with in the House. Whether it should be dealt with in Committee in the first instance or on the Floor of the House is something which needs careful consideration.

Mrs. Knight: Although the Leader of the House has said that he is unable to tell us when he proposes to give time for completion of the Medical Termination of Pregnancy Bill, may we at least ask for an assurance that, when it is discussed, the Government will not put a Whip of any kind on it?

Mr. Crossman: Yes. That assurance has already been given, and I repeat it unequivocally.

Mrs. Renée Short: In view of the great concern in the House and in Hertford-

shire and Essex about the possibility of siting the third London Airport at Stansted, will my right hon. Friend arrange for a debate to take place on the subject at the earliest opportunity, because it is high time that the House had an opportunity to discuss it?

Mr. Crossman: Certainly, at the earliest opportunity. I am having the matter discussed through the usual channels, because there are complications about a debate on the Floor of the House—[HON. MEMBERS: "Why?"] Hon. Members should listen to what I have to say. The Government want to get this Order through and have a debate as soon as possible. I accepted last week that there was a general feeling among the Opposition that they did not want to debate just the Order, but the White Paper and the Order. I pointed out the difficulties because of the case which is threatened in the High Court. There are also strong representations from the county council, which does not want the Order pushed through until the legal position is clear. This is a most important Report which must be discussed fully, but there are reasons why we cannot take the earliest opportunity to do so. There may be a delay of a few weeks.

Dr. Winstanley: May I draw the attention of the Leader of the House to Motion No. 572, referring to the fall in the percentage of registered disabled persons employed by Government Departments? The Motion is critical of the Chief Secretary to the Treasury. Will he, therefore, provide an opportunity for a debate, so that his right hon. Friend can give an explanation?

[That this House notes with regret the failure of the Chief Secretary to the Treasury to reveal to the House in answer to a Parliamentary Question on 13th June the fact that the percentage of registered disabled persons employed by Government Departments has now fallen below the standard three per cent. prescribed by the Minister of Labour, and deplores the Government's failure to take effective steps to remedy the position.]

Mr. Crossman: I would myself maintain that the Government's record in this connection compares very favourably with outside industries. However, I am


prepared to say that this is a subject which ought to be debated, though I see no time available in the immediate future.

Mr. Moonman: Will the Leader of the House reconsider his decision not to allocate time to debate the Press? Since the last debate, we find that the Sunday Citizen is to close on Sunday and that two more national papers are likely to close down in the next 12 month0073?

Mr. Crossman: I did not exclude the possibility. I said that it was not the most urgent of subjects. We have a great deal of legislation to debate and complete, and I did not want to give a false impression that we could have a debate in the near future.

Mr. Neave: May I draw the attention of the Leader of the House again to Motion No. 518 and ask him whether he is aware that I have submitted this case to the Parliamentary Commissioner today and that he will be reporting in a few weeks? If he does so before the Summer Recess, will the debate about which he has given an assurance take place then?

Mr. Crossman: We must wait and see when the report comes forward. There will be a debate, but I cannot guarantee exactly when it will be.

Mr. John Lee: Will my right hon. Friend reconsider his reply to the hon. Member for Mid-Bedfordshire (Mr. Hastings) about a debate on Rhodesia, bearing in mind that Lord Alport's visit, whatever the outcome, is of considerable importance? Will he also give time in the near future for a debate on higher education, since it was—

Mr. Speaker: Order. I think that the hon. Gentleman had better ask for one subject any one week.

Mr. Crossman: I can only repeat what I said before about Rhodesia. I cannot possibly give a promise about a debate before Lord Alport's return. As for a debate on higher education, I can give no assurance about the immediate future.

Mr. Blaker: Am I right in understanding that the only reason which the Leader of the House has advanced for the procedure which he is proposing for the debate on Aden is that it suits the convenience of the Foreign Secretary? If it is, since it has been said by the Foreign

Secretary to be such a very important statement, is that reason good enough?

Mr. Crossman: If the hon. Gentleman gained that impression, it was a false one. What I said was that we have to consider the wish of the House. The House is clearly divided, but it is certain that the majority believe, with me, that we ought to have the debate on Monday after we have heard the Foreign Secretary's statement.

Mr. Mayhew: Will my right hon. Friend say when it is proposed to discuss the general question of the Middle East crisis, apart from Aden?

Mr. Crossman: I gave an assurance last week that, if we needed to have a further debate, we would consider it, but that we must watch the Middle Eastern crisis week by week and judge for ourselves, through the usual channels, if and when a debate was necessary.

Mr. Stratton Mills: Does the right hon. Gentleman recall that the White Paper on Broadcasting was published as long ago as December? As these White Papers are always debated, can he give an assurance that there will be a debate before the Summer Recess?

Mr. Crossman: I cannot give the hon. Gentleman that assurance. I remind him that we have had Second Readings of Bills which have enabled certain aspects of broadcasting to be discussed. I agree with the hon. Gentleman that certain aspects of this White Paper have not been discussed, but I cannot give him the assurance for which he asks.

Mr. Goodhart: Can the right hon. Gentleman say when we can expect a comprehensive statement from the Government on the assistance that is to be given to those British citizens who have been forced to leave Arab countries during the last few days?

Mr. Crossman: I am grateful to the hon. Gentleman for putting that to me. I shall discuss this with my right hon. Friends and try to see that a statement is made at the earliest opportunity.

Sir C. Mott-Radclyffe: If we cannot have a statement about Aden this side of the weekend, so that it can be studied properly before the debate, could not the text of what the Foreign Secretary


will say in the afternoon be made available in the Vote Office on Monday morning? This House cannot debate in a responsible manner a long and complicated statement about Aden unless they have it in print before them.

Mr. Crossman: I will certainly put that to my right hon. Friend, but I suggest to the hon. Gentleman that we have had many previous statements followed by debates, and I add that in the initial discussion, when the Leader of the Opposition put this to me, I think that he said that he wanted a debate and then a statement would be made. I do not want to keep him to his words, but, normally, a statement is male and a debate follows on it.

Mr. Heath: As the right hon. Gentleman has referred to what I said on 11th May, perhaps I might point out that in the two preceding business questions I made it quite plain to him that what we wanted was a statement and an opportunity to consider it, which meant a day between the statement and the debate. This has been made plain to the House and I am sure that the right hon. Gentleman recognises it. May I make it plain to the right hon. Gentleman that we think that the attitude of the Foreign Secretary, after the House has displayed the utmost patience over Aden and not pressed for a debate, is arrogant and intolerable. All I say is that is that the Leader of the House has our sympathy in having to put up with such a Foreign Secretary.

Mr. Crossman: I totally repudiate this. I think that we have a perfect right to discuss the merits of the various timings, and that this timing is to the wish of the majority of hon. Members.

Mr. Mendelson: Is my right hon. Friend aware that in spite of the synthetic excitement which the Leader of the Opposition has worked up, he and his colleagues regularly resisted any suggestion that was made by us when we were in opposition that a debate should not follow immediately on a statement? The right hon. Gentleman is today controverting his own attitude.

Sir A. V. Harvey: Does the right hon. Gentleman appreciate that many hon. Members at least on this side of the

House were surprised at the lack of information which the Government have about the Suez Canal? As this state of affairs will not only not assist aid for the refugees, but will be detrimental to the economy of this country, will the right hon. Gentleman ask the Foreign Secretary to consult the Israeli Government, who can probably give him as much first-hand information about the state of the canal, what ships have been sunk, who by, and when they can be cleared?

Mr. Crossman: I would remind the hon. Gentleman that the question was about British persons on ships and not about the broad issue of the canal. The Parliamentary Secretary answered that question, I think, thoroughly and then wider questions were asked in supplementaries. These questions having been asked, I have given the assurance that there will be a statement next week when the information is gathered. We have no diplomatic representatives in Cairo. We have to rely on the Canadians, but we will get the information.

Mr. Hawkins: Can the right hon. Gentleman give an assurance that the Report of the Wise Committee on Smallholdings will be considered before the Summer Recess, in view of the fact that both parts have been published and that smallholdings policy is being held up in the county councils for lack of this report?

Mr. Crossman: Many hon. Members spent last weekend studying this solid document and I am sure that it will be further studied before the Recess; but whether there should be a debate before the Recess is a different question, on which I can give no assurance.

Mr. C. Pannell: Will my right hon. Friend refresh his mind about this before next week so that he will be able to tell the Opposition that the last time we had trouble with the Suez Canal it was closed not for six days, but by them for about six months?

Mr. Speaker: That was not a business question, ingenious though it was.

Mr. Edward M. Taylor: If no firm agreement is reached—[Interruption.]

Mr. Speaker: Order. We are coming to the end of business questions.

Mr. Taylor: If no firm agreement is reached over the weekend between the N.U.R. and the British Railways Board about the Continental terminal depot, will the right hon. Gentleman give an assurance that there will be a statement on Monday by the Minister of Transport, the day on which the terminal is due to be opened?

Mr. Crossman: I cannot give that assurance, but I shall communicate the hon. Gentleman's request to my right hon. Friend. If necessary, I am sure, that she will accede to it.

Mr. Maxwell: Is my right hon. Friend aware that we on this side of the House deeply deplore and resent the personal cheap attack by the Leader of the Opposition on the Foreign Secretary? Further, will my right hon. Friend consider making sure that the Foreign Secretary makes it clear that he was pulling the former Administration's chestnuts out of the fire in Aden and that it was because—

Mr. Speaker: Order. That is for Monday's debate, I think.

Mr. McMaster: In view of the deplorably high summer rate of unemployment caused by the Government's projected credit squeeze, will the right hon. Gentleman fix an early day for a debate on economic affairs as they affect Northern Ireland?

Mr. Crossman: I shall certainly bear in mind that we owe Northern Ireland a day. We will consider when we can take that day to the convenience of the House.

Mr. St. John-Stevas: Will the right hon. Gentleman reconsider his decision not to tell the House the date the Government have chosen for the further consideration of the Medical Termination of Pregnancy Bill since, if every hon. Member is to have an equal opportunity of coming here, the right hon. Gentleman should give as much advance notice as

possible? Can he confirm that the date is 3rd July?

Mr. Crossman: There is no question of reconsidering our decision, because the Government have not decided. I said that I could not, on this business statement, give a decision, but I assure the hon. Gentleman that time will be given. We will give adequate notice to hon. Members. It is a reasonable request that everybody should have reasonable time, so that they can attend if they wish. I give the assurance that we will do that.

OFFICIAL REPORT (CORRECTION)

Mr. Maxwell Hyslop: On a point of order, Mr. Speaker. May I draw your attention, and ask that a correction be made in tomorrow's OFFICIAL REPORT. to an unusual series of mistakes in c. 689 of today's HANSARD.
Following an intervention by the hon. Member for Penistone (Mr. Mendelson), a sentence of my speech has been omitted, and the rest of my speech has been attributed to the hon. Gentleman.

Mr. Speaker: I am sorry that the hon. Member should have been misreported in this way. An intervention has been spatchcocked into his speech, or part of his speech has been spatchcocked into the intervention of the hon. Member for Penistone (Mr. Mendelson), and part has been omitted.
The Editor of the OFFICIAL REPORT discovered this error this morning and wrote to me to express his regret and his intention to put in an erratum tomorrow. I apologise to the hon. Member for the error. It will be corrected in the bound OFFICIAL REPORT, and, as I have said, an erratum will appear in today's OFFICIAL REPORT.
This is rather unfortunate. It seems almost as though the Official Reporters have been embarrassed by the compliments we paid them yesterday.

Orders of the Day — FINANCE (No. 2) BILL

Further considered in Committee [Progress 14th June.]

[Sir ERIC FLETCHER in the Chair]

New Clause 14.—(INCREASE OF TAX RELIEF FOR BLIND AND ITS EXTENSION TO OTHER DISABLED PERSONS.)

In section 9 of the Finance Act 1962, as amended by section 10 of the Finance Act 1965 (Relief for blind persons), for the references to '£100' and '£200' respectively there shall be substituted references to '£125' and '£250' and these sections shall also apply to any other disabled person, which means a person who is deaf, dumb or otherwise substantially handicapped by loss of physical or mental faculty which is likely to be permanent.—[Miss Pike.]

Brought up, and read the First time.

4.9 p.m.

Miss Mervyn Pike: I beg to move, That the Clause be read a Second time.
The purpose of the Clause is quite simple. It seeks to increase the present allowance to restore its value to the original level, and to extend the allowance beyond the very narrow category of disability from blindness to other forms of disability which are deserving of our help.
As the Committee will recollect, the blind person's tax allowance was first introduced in the 1962 Finance Act. Since then the cost-of-living index has gone up considerably. It went up by 19½ points between January. 1962, and April, 1967, and it is still rising. The most dramatic price increases are in just those commodities which hit the blind and disabled hardest, like heating, food and everyday household goods, but also in personal services like laundry, dry cleaning, household cleaning, decorating and the sort of things which many of us can do for ourselves, by way of "make-do-and-mend", and save a considerable amount.
Do-it-yourself decorators and home handymen can insulate themselves from many of these rising costs, but that is not possible for these people. Thus, they are hit hardest by the rising cost of living which affects us all. Also, of course, the cost of the stamp has risen and many of these people have to employ extra help

in the home to maintain themselves and their households.
We have had another "trailer" for a forthcoming attraction from the right hon. Lady the Minister of Social Security in the recent Press leak that pensions will go up. I wish that these statements could be made in the House rather than by Press leaks. From the Government's point of view it is probably better publicity, as they get several bites of the cherry, but if there is, as we are told, any truth in the statement, this will mean, possibly, that the cost of the stamp will go up again, which will also mean an added cost for these people.
It is, therefore, absolutely essential to address ourselves to the case for restoring the value of the present allowance. With this proposal, we also believe—this view is shared, I think, by most hon. Members—that the time has come to extend the allowance to substantially handicapped people other than the blind alone. I cannot believe that I should delay the Committee by spelling out again the case for giving special consideration to all disabled people. However, if the Chancellor and his colleagues do not feel inclined to listen to my argument, perhaps they will take some account of what the Royal Commission on the Taxation of Profits and Incomes said.
The Chief Secretary will remember that, in its second Report of April 1954, a considerable amount was said about this. Although my words might be called special pleading, he will surely have no objection to considering this argument from the Royal Commission. I make no apology for reading it out in full, because it should be considered again. On page 63, the Commission said:
The Taxpayer's own disability is hardly recognised under the existing system. Yet there are many kinds of disability (putting aside age, which is provided for by a special relief) so severe that they modify the whole conditions of a person's life and impose upon him a constant levy of extra expense which may fairly be said to affect the taxable capacity of his income.…
Our general conclusion is that grave disability ought to be the subject of allowance. It presents itself to us as a personal circumstance that sets apart those who suffer from it and directly affects their relative capacity to pay. We do not mean that it affects their earning capacity. It may or may not, but so far as it does, the graduated scale of tax will diminish the burden on diminished earning power. What we are thinking of is a range


of additional expense attendant upon the condition of their normal life, not least upon the maintenance of their earning capacity, which yet goes unrelieved under the existing code. To take one instance. Many disabled persons must meet the expense of a constant attendant. Some forms of this expense are covered by tax-free grants (e.g., wounds and disability pensions of ex-service men): in other cases they are not. Yet, though we have been pressed to recommend a special allowance for a constant attendant, we feel bound to recognise that such an expense is only one form of a wider range of disadvantages, and that what is needed, if irrelevant distinctions are to be avoided, is an allowance dependent upon an extreme measure of disability as such, in whatever form of expense the consequences of that disability may be expressed.
4.15 p.m.
The Commission went on to say that the figure of the allowance which it envisaged, though not capable of precise definition, was no less than £100. The Committee will remember that, in 1954, that had a very different value from £100 today. Therefore, we can accept the case for increasing the allowance as unanswerable. The present tax allowance for the blind is £100 if either the husband or the wife is blind and £200 if both are blind.
Therefore, by extending Section 9 of the 1962 Act, which provides this relief for other substantial disablement, the new Clause would cover the wife who is disabled, which is a category with which many of us have great sympathy, particularly at the moment, when their case has been brought so dramatically and effectively to our attention. The Clause would assist those most deserving cases in which the wife's disability necessitates some paid help in the home, or in which—this is possibly the more difficult case—the husband has to accept a lower-paid job to be closer at hand to look after his wife.
This is the case in which day-to-day household expenses are undoubtedly higher and the pressures are greatest. This is the case in which marginal relief of this kind would enable the husband or wife to be kept at home rather than apart from his or her family in a home for the handicapped, and not to have to feel a constant burden to the household.
The Royal Commission proposed that the tax allowances should be available for 100 per cent. disablement, as in war disability pensions. The subject of the tax allowance for the disabled was debated on a new Clause to the 1962 Finance Bill and was strongly pressed by

the present Chancellor and his colleagues on the Front Bench. I do not intend to read extracts from their speeches, as they are no doubt well known to hon. Gentlemen—

The Chief Secretary to the Treasury (Mr. John Diamond): Or extracts from the answers which were given?

Miss Pike: No, I have no doubt that I will be getting those later.
During that debate, three main difficulties were stressed. The first was the rigidity of tying the allowance to 100 per cent. disablement and the question was asked: what about the person with 99 or 90 per cent. disablement? Second was the problem of a definition and the difficulty of administration and it was argued that disability should be dealt with by cash benefits rather than special allowances. But the present Chancellor, after agreeing that there were great administrative difficulties said that he would make the reforms asked for in the new Clause.
… irrespective of administrative complications and tell the Inland Revenue to get on with them. I have seen this happen in the past in connection with P.A.Y.E."—[OFFICIAL REPORT, 30th May, 1962; Vol. 660. c. 1448–9.]
The right hon. Gentleman was categorical about that and can now carry out that promise and tell the Inland Revenue to get on with the job. He has told it to do some crazy things and now has the chance to redeem himself and tell it to get on with something which we all believe is sensible and just. We recognise, of course, that there will be borderline cases, but there is never really sufficient reason for penalising those most deserving of help and encouragement just because we find it difficult to overcome administrative difficulties.
The other objection relating to the difficulties surrounding the rigidity of tying the allowance to 100 per cent. disability would be overcome by the new Clause. It provides that the allowance should be payable where the disability is substantial and likely to be permanent. These are the requirements of any disablement benefit paid under the 1946 Industrial Injuries Act which further defined "substantial" as disability of not less than 20 per cent. This definition is already in use in the entitlement to disablement pension and it is therefore logical now to use a familiar one.
It is no good saying, "We can use this simply under the Industrial Injuries Act, but it is difficult and almost impossible to apply it to anyone outside that category." I know what the arguments will be, as they have been brought up before, and I know that it is a difficult judgment, but the time has surely come for us to make another attempt to go forward with this familiar definition, which we can usefully try.
Of course, there would be other administrative difficulties. There would have to be a requirement for a medical examination and decisions on a wide range of diseases. The present tests are confined to industrial disease and accidents and to war disabilities. Of course, there would be a problem in getting additional medical manpower to carry out these examinations. All these arguments were made in 1962, but there has been time since then to think of ways and means and machinery to overcome these difficulties and disadvantages.
At that time, the main reason why the blind were singled out for an allowance was that they were registered and that blindness was easily identifiable and thus few of the difficulties were apparent in this category. The allowance has been on the Statute Book now for five years and there is no great administrative problem which could not be solved. Surely the time has come to take yet another step forward.
If we cannot go the whole way, surely we should go half of the way. The Minister could prescribe diseases, as is done in the case of the Industrial Injuries Scheme. For example, those suffering from multiple sclerosis and the deaf and dumb are clearly recognisable categories which would not present the same administrative difficulties as some—

Mr. Diamond: The right hon. Lady is, of course, aware of the enormous number of different categories under the term "deaf".

Miss Pike: I agree, but I am saying that we could prescribe another range and move forward from there. I do not accept that, because these things are difficult, we cannot go forward at all. If the right hon. Gentleman cannot act over the whole range of disease and in-

jury, we should be satisfied if lie would at least try to go one step further.
I would also draw his attention to new Clause No. 63, although I cannot, of course, argue its merits, because I promised not to get out of order. I would say only that this also would be another small way of trying to test this proposition. I will go no further, as I do not want to get out of order at this point in my speech—

The Chairman: Nor at any other point, I hope.

Miss Pike: I am trying my best, Sir Eric.
The third major point raised in the 1962 debate was that disability should be dealt with by cash benefits rather than by special tax reliefs and the argument has some force. However, I would draw the Committee's attention to the fact that the gap is widening here because those categories which have at present a cash benefit by way of pension are in the more fortunate position of having their benefits constantly increased to meet rising costs, while so many of the people of whom I am talking get no help at all. Thus, by giving them a taxation allowance, we should be doing something to close that gap.
The Royal Commission also suggested that people should not be entitled to both a tax allowance and a tax-free cash benefit for disablement. The Committee will recollect that the war disability pension and the various other allowances, as well as similar benefits payable under the Industrial Injuries Scheme, are free of tax and the pensions of war widows and industrial injuries widows are taxable. The Royal Commission suggested that there should be a choice between tax-free benefits and a tax allowance. The new Clause meets this point. As is already the case with the blind person's allowance, there would be a choice between the tax-free cash benefit and a tax allowance, whichever was the most favourable.
At present there is no cash allowance whatever for those who are crippled or handicapped and who are suffering from diseases like multiple sclerosis, or where the wife has become chronically disabled, for apart from the ordinary sickness benefit which is payable when


earnings are interrupted due to illness, cash allowances are confined to industrial or war injuries.
I have often urged that these gaps in our social benefits arrangements should be met by a special invalidity benefit, although today we are concerned with taxation matters and I will not pursue any other course. We have this glaring anomaly of a man disabled through an industrial disease and a man disabled through some other illness, and we must give our close attention to this matter.
A man who is ill and is suffering from multiple sclerosis gets a flat-rate benefit of £6 10s. a week. A man suffering from an industrial injury in the 100 per cent. category gets a flat-rate benefit of £6 15s. a week, but in addition he can get certain allowances. For example, he can get a constant attendance allowance of £2 15s., an unemployability supplement, if he is unable to earn or if he can earn only £106 a year, of £4 a week. There are also the wife's allowances, and these can reach £13 15s. a week. There are still other allowances that can be earned in certain circumstances.
The anomaly to which I am pointing is that those who are disabled through an industrial disease can have allowances worth £13 15s. a week, or even more, whereas those who are disabled through illness are confined to the flat-rate benefit of £6 10s. a week. The Clause is designed to help the most deserving section of our people.

Mr. Joel Barnett: The hon. Lady is not strictly correct in making that statement about these people being the most deserving. Are not the most deserving those who are not paying any tax at all?

Miss Pike: The hon. Gentleman will agree that those who are not paying tax and who are on supplementary assistance are often finding that the resources of the State are helping them in possibly a far more comprehensive manner than those who are on the borderline. I do not want to draw a distinction between those who are more or less deserving, but the hon. Gentleman will surely agree that the people about whom I am speaking deserve our help.

Mr. Barnett: I was not intending to say that these people do not deserve our

help. The hon. Lady stated that they were the most deserving. I was saying that there is another group of people, almost certainly very many more of them, who are even more deserving in the sense that they are living on much smaller net incomes.

Miss Pike: We need not quibble about words. Most hon. Members will accept that a person with a crippling disablement or handicap should be regarded by us as among the most deserving people in the community. Through no fault of their own, their earning capacity has diminished; and, on reflection, I am sure that the hon. Gentleman will agree, without quibbling about the use of words, that this category of people is, to say the least, a very deserving category within the community.
The new Clause would, in the main, help those who, despite their disabilities and handicaps, have the great courage to make the effort to go out to work. This very factor entitles them to the greatest consideration that we can give them. Their earning capacity may be greatly reduced—in the majority of cases that happens—and their day-to-day expenses are increased.
4.30 p.m.
We accept that it is a good thing to encourage these people to go out to work. It is good for the community as a whole and for them, not only as human beings in our society but because it encourages them to develop their mobility and participate in the community. This helps all the other people who are suffering from disabilities of one sort or another. Because of their sufferings, many of these people are particularly perceptive and sensitive. They have a significant contribution to make to society and to the quality of our lives. Because of this, they are deserving of every help and encouragement.
The Clause would also help the couple where the wife is disabled. This category of people should be given all possible encouragement and support. It is often the case that, in this type of home, extra help must be employed and must be paid for, often because relatives do not live nearby and there are no friends available to give the help that is needed. In these cases some tax relief could tilt the balance and make it possible for the wife to stay at


home rather than be separate from her family by being admitted to the chronic sick ward of a hospital. Separation of this type increases personal misery as well as the cost to the State.
Often a marginal judgment must be made about whether or not a person can be kept at home the whole time or whether, because funds are not available, that person cannot be kept at home for all but part of the year. In such cases the person concerned is often admitted to a chronic sick ward. Relief of the kind my hon. Friends and I are advocating would bolster the self-respect of these people and give them a sense of independence. This particularly applies to wives in this position.
The Chancellor argued for a provision of this type when in opposition. Acceptance of it would not put inflationary pressure on the economy, but would do something which we regard to be a simple act of justice for those who deserve our help. If the Chancellor considers this in a humane and objective manner, he will agree that, even if he cannot go the whole way, he should at least concede that we should now take another step forward to give these people the help that they deserve.

Mr. Tim Fortescue: I am not sure whether it is a privilege or punishment to participate in this apparent annual charade in which hon. Members from the political party which happens to be in opposition urge the Government to introduce Income Tax reliefs for the disabled and in which the representatives of the Treasury Front Bench, with their hands on their hearts, tears in their eyes and throbs in their voices, assure the Committee of their tenderness towards the disabled and their utter kindliness towards the world in general—and then go on to say that nothing can be done. This has been going on for years.
In 1962, we had the concession to which my hon. Friend the Member for Melton (Miss Pike) referred—when the eloquence and charm of my hon. Friend the Member for Plymouth, Devonport (Dame Joan Vickers) wrung a concession for the blind from her own Front Bench. In 1965 this concession was slightly extended. Apart from that, we have had

nothing at all. There has been nothing for years and years and the reasons given have always been the same, whichever party has been in power; and on reading the various speeches that have been made by Treasury Ministers, their arguments appear to be threefold.
Either the Minister says that it is not the right year, or that the timing is wrong—" The economic situation is bad this year and that we cannot do it. We would like to do it, but we cannot". Or the excuse is that the proposals are administratively impossible to implement. Or the Minister says that a tax relief is not the right way of doing it. He says that it should be done, but that it must be done by cash allowances.
The first two objections can be dealt with shortly. To say that it is not the right year is no excuse, because it is never the right year. To those who work in the Treasury, no year is the right year to give any concession. It takes a very strong Minister indeed—one who is in complete command of his Department—to force his will on his Ministry and insist that something be done. As my hon. Friend the Member for Melton pointed out, the present Chancellor of the Exchequer said, when in opposition, that he would do exactly that. He said that in 1962. Now he is in power and we will watch with interest to see whether he lives up to his word.
The second argument—that the proposal is administratively impossible—can be dealt with by reminding the Committee of what the Chancellor said when in opposition; that whether or not it was administratively difficult he would see that it was done. Now, as he has the power, he can do it. We will watch with interest to see if he does it.
The third argument—that this relief to the disabled should be met by cash payments—is a more respectable one and is a case which could be adduced from either side of the Committee. However, this argument was, to some extent, disregarded in 1962, when the tax concession for the blind was introduced. Under this concession a blind person has a choice between a tax-free cash benefit and a tax allowance, whichever is the more favourable. But there is no cash allowance for the handicapped and disabled.
It seems entirely hypocritical for Ministers to say that the problem should be dealt with through the social services when they are perfectly ready to accept that it is not being dealt with through these services. It is all very well for them to shuffle off their responsibilities on to another Minister and say, "It is not a matter for the Treasury, but for the Minister of Social Security". They can say that until they are blue in the face, but when they are in Cabinet they must accept that nothing is being done.
Could not the Chief Secretary put himself in the shoes—perhaps that is a bad metaphor, because many of these people do not need shoes—in the place of a cripple who hears, year after year, that everybody would like to do something for him, but who sees nothing whatever being done? I remind the Committee of the ridiculous amount of anomaly there is in the set-up of cash benefits for handicapped and disabled people under our social service system.
I will confine my indictment to a narrow point, the provision of Ministry of Health transport for the disabled. For this purpose there are three kinds of disabled person; the person who is not sufficiently disabled to be provided with transport, the person who has exactly the right degree of disablement to be provided with transport and the person who is too seriously disabled to be so provided. Out of this categorisation, an enormous amount of anomaly arises. I appreciate that a line must be drawn between the first two—between those who are not sufficiently disabled to be provided with transport and those who have exactly the right degree of disablement for this provision.
Although many hon. Members would not agree with the place at which the line is at present drawn, they would admit that a line must be drawn somewhere. However, for there to be no provision at all—no cash allowance or benefit—for the man who is so severely disabled that he cannot be provided with transport, is ridiculous, illogical, inconsistent and cannot be defended.
I cite the case of a man I know—

Mr. Diamond: I am endeavouring to follow the hon. Gentleman's argument. Will he tell me whether these categories are the categories which he suggests,

under the new Clause, should be divided? I ask that because the Clause does not refer to any such division.

Mr. Fortescue: If the right hon. Gentleman will allow me to develop my argument, he will appreciate what I am saying.
I cite the case of a man I know personally. He is unfortunate enough to be what is known as a quadriped poliomyelitis case, which means that he is paralysed in all four of his limbs. This affliction started in his legs and, at first, his legs were paralysed. At that stage he was provided with a Ministry of Health vehicle and was able to drive himself to work every morning. He acted courageously, to the benefit of himself, his family and the community.
Then, tragically, the disease spread to one of his arms. Because of that he was no longer able to drive the vehicle. In that situation he not only lost the vehicle—because he was unable to drive it—but he lost the allowance of £110 a year to which he was entitled to help him to maintain the vehicle. He lost all mobility because he could not afford to buy a car for himself. The result was that he had to stay at home. He lost his job, he lost his income and was far worse off by becoming more disabled than he had been when he was only partially disabled. That is the kind of ridiculous anomaly that arises from the present administration of our welfare system, and it demonstrates the urgent and desperate need there is for the whole of our social service benefits for the handicapped and disabled to be overhauled.
I urge the Minister to accept the new Clause, and not once more to trot out the old arguments, which are dog-eared from many years' use by both political parties, that such an extension of benefit is some other Minister's responsibility. At the same time, I urge the other Ministers to come forward with a co-ordinated scheme for recasting the system of benefits for the disabled so that those benefits are seen to be both fair and comprehensive.

Dr. David Owen: I oppose the new Clause, and I do so with a heavy heart. I am sure that we are all deeply concerned about the problems of the disabled. I ought to make one thing quite clear. Outside the House I am


Vice-Chairman of the Disablement Income Group, and I am sure that what I say does not necessarily represent the view of that body, if it has a view, about these allowances. I should not like it to be thought that I am speaking for the group. Mine is a very personal view.
I have made it quite clear on other occasions, particularly in connection with family allowances, that I consider that we should not continue this separation of tax allowances from benefits which we pay out through the social security system. I should like to see the Inland Revenue and the Ministry of Social Security get together and have a unified policy.
In passing, I cannot help referring to new Clause 22 which I know will be discussed later, because the basic issue is similar. In new Clause 14 there is a much more complex argument, but when we turn to new Clause 22 we know there already exists a cash allowance, that there are already family allowances. On that Clause, I could put a much stronger case for just increasing family allowances. I believe that to increase the tax allowance for families in the present situation is indefensible. But the point has been fairly made that no cash allowance exists at the moment for the disabled. A powerful argument can, therefore, be made for saying that since no other machinery exists it is unfair to deprive disabled people of the one benefit we can give them through the taxation system.
A number of arguments can be deployed against that case, although I recognise its strength. The first is based on inequality. It can be said that when we are trying to relieve some people irrespective of income we must remember just to increase the tax allowance is to give that relief selectively to a rather smaller number of the population than would be the case in going towards the cash allowance system. That does not necessarily make it wrong—there are always occasions when we introduce a benefit for some people at different times. But I believe that we should have a cash allowance for disablement, and I am extremely concerned that if we extend the tax allowance system to include all forms of disablement the pressure for the disablement income will be taken off and we

shall be going gack to a system of separation in the social security system and that the case for a disablement income will be weakened. We will, for instance, syphon off a great deal of the discontent of the most articulate section of the population.
If we really want a disablement income we must press for one thing, and one thing alone, and that is for a cash allowance to disabled people at all income levels. Hon. Members opposite should give attention to this view. The hon. Lady the Member for Melton (Miss Pike) argued, unfairly, that people who were not getting some benefit from tax allowance would gain from the supplementary benefit system, but she knows as well as I do that that system makes very little allowance for the disabled person. These people are living at a minimal standard, and a large section of the population pay no tax at all—

4.45 p.m.

Miss Pike: I did say—I was anxious not to transgress the rules of order—that in any event I preferred the cash allowances. We are not arguing about that at the moment, but I should like to see, and I said so this afternoon, a cash allowance.

Dr. Owen: I am grateful to the hon. Lady. I know that she does wish to see a cash allowance, but this is central to the argument and I do not consider that the two matters can be divorced. If we allow them to be divorced, the case for a cash allowance will fall into disrepair. I have no doubt that, if we start extending the range, the Disablement Income Group's case for a specific disablement income will be greatly weakened.
We have been told by successive Governments how difficult it is to administer a tax allowance for all disabled people. One of the greatest problems is that we do not know who are disabled. We have a totally inadequate disablement register. We have no facilities for finding out who are disabled. The administrative argument, which is so often knocked down, happens to be, to my regret, very real.
What is so important about getting a disablement income, a cash allowance, is that there would be a necessity for the Ministry of Social Security to draw up a quite clear-cut category of disabled


people, and search out those who are disabled. That is what we need. We all know in our constituencies that those in social work and the medical profession constantly find people living the life of disabled persons unknown to any one, even their neighbours. It is a very real problem.
I therefore feel that a system of tax allowances is the wrong approach. It is unfair. It perpetuates inequality. It gives the benefit to one section of people who are better off while ignoring those who are not paying any taxation at all. It is true that there are some people on the lower levels who pay tax and find things extremely hard. I have no doubt that the Clause, if it were accepted, would help some of them considerably, and one is loath to oppose anything that would help people who are in a bad plight because of a disability.
The important thing is to try to give some relief to the disabled wife. That is the central problem. The new Clause would take some account of this by providing that, where the wife is disabled and the husband is earning, the husband could claim the benefit. That is an ingenious way round the problem, but there are many people who would not gain at all from a tax allowance because they do not pay at the standard rate.
The Government, when looking at their social security system, must look at this central problem. It is a deeply Socialist problem. We have to analyse our social security system and not perpetuate this differential between tax allowance, on the one hand, and benefits, on the other. The Chancellor seems to believe that this is a fundamental difference, but I do not accept that it is a fundamental difference. The sooner we can integrate these two aspects and, one hopes, go to a unified tax coding system that covers everyone, the better.
In present circumstances, and particularly in view of our economic problems, I do not think that this Clause offers the best long-term advantage to the disabled population. Indeed, it might work against their long-term interests in obtaining a disablement income.

Mr. Philip Holland: I cannot quite agree with the description my hon. Friend the Member for Liverpool,

Garston (Mr. Fortescue) applied to the debate as being a charade. To me, a charade is an empty, meaningless exercise. I regard what we are doing today as part of a continuing process of applying pressure to Treasury Ministers to obtain an improvement in the tax system as it affects the disabled. It is not entirely a waste of time or a meaningless exercise. We have had some success in the past. The blind now receive a tax allowance. I believe that, if the pressure is maintained, the whole system will be extended. On that ground, I disagree with my hon. Friend, though otherwise I agreed with much of what he said.
The hon. Member for Plymouth, Sutton (Dr. David Owen) expressed concern about the difficulty of definition. I accept his point of view, that he would rather have a cash benefit. Many of us would agree with him about that. If there cannot be a cash benefit, we want to obtain some recognition. This is the purpose of the Clause. An attempt has been made in the Clause to define who is disabled. I am sure that my right hon. and hon. Friends would be interested to know of any more precise way of putting it and would be willing to consider an Amendment to the terms of the definition, provided that we received a concession from the Treasury on a tax allowance for the disabled.
My hon. Friend the Member for Melton (Miss Pike) reminded us that the Second Report of the Royal Commission on the Taxation of Profits and Income, 1954, advocated a tax allowance for grave disability on the grounds that a serious physical handicap reduced the taxable capacity or potential of the individual either by impairing his earning capacity, or by involving him in a range of additional expenditure attendant upon the conduct of his normal life—in other words, because to live as others live the disabled person is involved in extra expenditure. Those were the reasons why the Royal Commission thought that there should be a tax allowance.
It is clear that it was on these grounds that in 1962 the Conservative Government introduced the £100 tax allowance for the blind. This was a beginning. Today, we ask the Government, after the tax allowance for the blind has been running for five years—so there is plenty of experience on the administrative side


—to extend the practice, building on the foundations we have laid, to include other impairing and recognisable disabilities. The principle of the Clause is that the criteria should be an impairing and recognisable disability. If the wording of that part of it requires alteration, I am sure that we should be sympathetic to suggestions.
If blindness merits a tax allowance—we firmly believe that it does—so do those who suffer from being deaf and dumb—I make that distinction; not the deaf and the dumb, but those who are both deaf and dumb—or those with multiple sclerosis, or those suffering the after effects of poliomyelitis. These are clearly recognisable afflictions. They can be distinguished. They certainly impair the taxable capacity of the afflicted. They fulfil the criteria used originally in the establishment of the tax allowance for the blind.
The Government may have other reasons for continuing the allowance for the blind. Perhaps they reject the original reasons. In that case, it would be interesting to know from the Chief Secretary on what criteria the Government are continuing the allowance for the blind. It may be merely for the passive reason that the Government inherited it and that they are just letting it continue, but I doubt it. It could be for some more positive reason—for example, as compensation for misfortune, or as recognition of the additional financial burdens that the disabled have to bear, or as some small compensation for loss of faculty, or as a little help for those who suffer a loss of earning power by reason of disability.
Perhaps the Chief Secretary will tell us about the Government's motives for continuing this allowance more precisely than by merely allowing us to assume that it is because of what the Royal Commission said in 1954. Will the right hon. Gentleman explain why it would be wrong to increase this allowance to take account of the rise in the cost of living since the allowance for the blind was introduced in 1962, and why it would also be wrong to extend the allowance, for the came reasons, to cover other people substantially handicapped by a loss of physical or mental faculty which is likely to he permanent?
The Clause is eminently reasonable. It is logical. It is a socially just extension of the tax relief for blind persons to include others incapacitated by difficulties of personal communication, either physical or mental, or by one of the appalling paralysis infections, or by some other infirmity limiting their freedom of independent movement.
The rate of tax relief proposed in the Clause is modest. It cannot be rejected on grounds of cost, in view of the benefit which I believe would accrue from it. To put up such an argument on grounds of cost—we are always suspicious of Treasury Ministers doing this—would be callous in the extreme. To refuse such a reasonable, logical and modest Clause would indicate an almost unbelievable lack of sensitivity on the part of the Treasury. It would be inexcusable. If the Chief Secretary is unwilling to accept the Clause, I hope that right hon. and hon. Members on both sides will prove him wrong by overruling him in the Division Lobbies. I certainly hope that my right hon. and hon. Friends will divide on this isue, if the Clause is turned down flat.
I have met many blind people and a large number of the deaf and dumb. I have a relative of my own age who has been recently stricken down with multiple sclerosis. I speak having had some personal experience of these people and considerable personal contact with them. All these people share one great asset in common in the form of the smile that comes so readily to their lips. Collectively, they are among the most cheerful people I know. I once had the honour to conduct a party of 30 deaf and dumb young people round the Palace of Westminster. It was the most rewarding party I have ever conducted round and one of the most cheerful.
I know of three hostels for the blind near my London home. I have visited them all and the happiness of the residents is a byword in the district. All we ask for in the Clause is to provide just a little more justification for the smiles on the faces of these people.
I hope, without, I admit, a great deal of confidence, that the Chief Secretary will have a favourable reply for us—and not only a favourable reply for us, but a little concrete encouragement for some of


the least fortunate members of the community.

Mr. Diamond: We are all grateful to the hon. Lady the Member for Melton (Miss Pike), who moved the Clause in her usual persuasive and attractive manner. I will follow her line and deal with the argument on the merits rather than on previous debates. The hon. Lady was good enough to make only one reference. I shall not respond with more than one reference. I would rather deal with this issue in that way than in the manner adopted by the hon. Member for Carlton (Mr. Holland), who we know has a great interest in these matters, who spends a great deal of time on them, and who is very knowledgeable indeed. I would rather deal with it on the basis of merit than on the basis of the Division Lobbies.
I say that because I have before me a list of those who divided on 30th May, 1962—I direct attention to HANSARD of that date, cc. 1453–54—on a precisely similar Clause. Among those who divided against the proposal we are now discussing was the hon. Gentleman.

Mr. Holland: My hon. Friend the Member for Melton (Miss Pike) explained what arguments were used and what the differences were between that debate and this one.

Mr. Diamond: We all recognise what the main difference was. The main difference was the particular bench and the particular side that we were sitting on at that time. Therefore, it is far better to deal with the argument than to deal with it on the basis of who said what when and who divided in which way when.

5.0 p.m.

Miss Pike: The right hon. Gentleman must accept that the arguments at the initial stage were very strong that it could not be done, but then, thank goodness, we tried a special category and went that far. What we are now saying, after five years of experience, is that we all recognise, with hindsight, that it was a good decision then to try that special category, and we ought now to go further.

Mr. Diamond: I am making the simple point that in that debate on a new Clause to give a 100 per cent. disability allowance, the hon. Member for Carlton took the view at that time that his duty was

to support his Government in the Lobby and oppose the allowance which we are discussing today. Nevertheless, as I say, I am happy to discuss the matter on the basis of merit and the sympathy which we all share.
The hon. Gentleman has close connection with sufferers. It so happens through relations of mine, that the situation of the deaf and dumb is something with which I have been familiar ever since I was a small child. It would be preposterous to suggest that there is any hon. Member of the Committee, on either side, who has not both knowledge of and sympathy for people who are less well equipped than himself. It is good for all of us, when we get up every morning, to be glad that we have two arms and two legs, that we have two eyes and that we can hear. We should be grateful that we are so blessed.
But then comes the question: what is the best way by which those who are responsible for the public purse may direct benefit to the needy? This is the point which my hon. Friend the Member for Plymouth, Sutton (Dr. David Owen) brought out in his speech. Should we try to give help to those who need it most? My view is that we should. It is exactly the same as the view held by the occupant of my office at the time of the debate to which I have referred, then the hon. Member for Hampstead. I share with him the view that help should be given where it is most needed, and, undeniably, it is most needed by those who have least.
I was most interested in the account which the hon. Member for Liverpool, Garston (Mr. Fortescue) gave of the pitiful case which came to his knowledge in which the person concerned, as the result of the loss of the use of his limbs, lost his job and, as the hon. Gentleman said, lost his income.

Mr. Fortescue: May I correct the right hon. Gentleman? After he had lost the use of his legs, he was not all right—it would be ridiculous to say that—but he was at least in a position to have some help. When he lost the use of another limb, he lost all the help to which he was previously entitled.

Mr. Diamond: I took down the hon. Gentleman's words, that the man had "lost his income". The hon. Gentleman is supporting a Clause which would


give that man no benefit whatever. We must all agree about that. It would give him no benefit because he was without income.
The whole tone and purport of the hon. Gentleman's argument was to support the Clause by reference to an extraordinarily difficult and pitiful case in which help should be given. I do not dispute that, but I am pointing out that it is no argument to support a Clause which would have given not one farthing of help in that case. If the man has no income, he pays no Income Tax. The Clause is directed to relief for a man who has not the use of his limbs, who has no income and who, therefore, pays no Income Tax. What a sad commentary.

Mr. Fortescue: I am sorry to interrupt the right hon. Gentleman again. I do not mean to be rude, but I do not think that I said that this man had lost his income. I think that I said that he had lost his job. He had some income other than the income which he had from his job, so that the Clause would have helped.

Mr. Diamond: I took down the hon. Gentleman's words, that the man had "lost his income". If the hon. Gentleman made a mistake, and meant to say that he had lost his job but had some private income, he will, am sure, agree that that man was not in such a sad situation as someone who had lost his job, and, as a consequence, all his income, he having no private income, either. Such a man is in a terrible state indeed. But the Clause would not give him any help. It would probably strike him as being a most curious and cruel irony that the Clause would, in fact, give no help to someone who was without the use of his limbs and without income.

Miss Pike: The man's wife could very well be earning and, in that case, she would have the allowance.

Mr. Diamond: It is charitable of the hon. Lady to come to the assistance of her hon. Friend, but we are considering a specific new Clause proposed for inclusion in this Bill. I am the Chief Secretary to the Treasury, not Minister of Social Security. This is a Clause to give tax relief. If the Clause gives no help, if it should not be supported—as we are beginning to realise it should not be—

it ought not to be brought forward. If the Opposition now say that this is not the way to help, they ought not to bring the Clause forward.
The idea behind the Clause is, "Let us relieve these people through their Income Tax". All I am pointing out is that anyone who approaches the matter from the standpoint of human sympathy and understanding will recognise at once that, although we all desire to give help to those in the greatest need, the Clause will do nothing of the kind. It will give not a farthing. It is entirely a Clause to help those who have less need.
I ask the Committee to consider what is proposed. It is ludicrous to look at this matter purely from the point of view of emotion. We have a duty in the House to help people, and, on that basis, we have a duty to help people who need the help most. This has been said from this Box by all responsible Ministers who have had charge of Government finances. They have not said it for the sake of being "mean" about the use of the taxpayer's money. Taxpayers generally would not dissent from paying taxes for useful and eleemosynary purposes of this kind. But, if one has responsibility as trustee, as it were, for the use of other people's money, one's job is to use it where help can best be given.
I say, first, that this is not a Clause to help those people, examples of whom have been given today. But, if it were such, we could not work it because of the vagueness of the definition. It would not be administrable. That is not a very solid argument, and I do not put it forward as an important objection, but I ask the Committee to be good enough to note that it would not be administrable because of the vagueness of the definition. We have no machinery for tests of this kind. It is easy to draw up rules and say that, if a man has had an industrial injury and he has lost the use of one leg he shall have so much, or, if two legs, so much; but one cannot translate that into terms of the chronic sick or the disabled as the Clause would have us do. One cannot define deafness and all these various categories and provide suitable rules. However, those are minor arguments. The major argument is that the Clause does not help those whom we most want to help.
If it is said that time has moved on since we last discussed the matter, that it is the


job of the back bencher to keep on pressing the Government to do something to show their understanding and to give help as far as they can through the tax machine, I reply that that is what we are doing this very year. My hon. Friend the Member for Sutton reminded the Committee that the wife is the one who should be helped, the incapacitated wife. By Clause 16 of this very Bill we are raising from £40 to £75 the allowance for a man who has the single-handed charge of a child because his wife is wholly incapacitated, the very case of which my hon. Friend gave an example.
An additional burden falls upon the husband who has to look after the child, and now, whether he employs a resident or non-resident child-minder, he will have the allowance, which was £40 for many years, the allowance which the Royal Commission said should be redrawn, now increased to £75. This is closely analogous to the situation with which we are dealing under the present Clause. Therefore, it will be seen that I cannot recommend the major part of the proposal to the Committee.
The argument then is, "Well, what about helping the blind by increasing the allowance? Has there not been some falling off in the value of money since it was first given, and is not £100 worth less than it was then?" That is true, but the blind allowance is in a rather separate category. The hon. Member for Carlton asked me on what basis we support it. The short answer is that we do so on exactly the same basis as the then Chief Secretary who, when he introduced it, explained at considerable length the distinction to be drawn between that allowance and all others.
The hon. Member said that he introduced it only on the firm understanding that it could not be used as the basis for other claims for additional allowances because the blind allowance could be distinguished. He said that the case of the blind could be distinguished in terms of human sympathy, severity of disablement, administrability and registration. A case could be put up for an allowance for the blind, but one could not build on that in a logical sense for allowances for others.

Mr. Holland: I was asking for the motive behind continuing it, not the

reason why it was possible. The right hon. Gentleman has given the reasons why it was possible to do it, but I was asking for the Government's motive. Is it the same as before, under the previous Government. or is it a new reason?

Mr. Diamond: I repeat that I accept the views of the then Chief Secretary, who explained them at great length. They were sound, and I accept them in all the senses he gave then. It is a special case meriting special consideration. It is to be distinguished from others and one cannot build a claim for others, as the Clause tries to do, on the basis of the help for the blind.
I have not dealt with the question of increasing the blind allowance somewhat, which is admittedly, a small point and not an expensive matter—nobody is complaining about that. I do not know whether the hon. Lady has worked out the figures, and I do not think that they matter. It is said that we must take some account of the fact that the allowance is not as valuable as when it was introduced. But one must remember that it is a second or additional allowance; it does not replace the personal allowance which a blind person gets. To the extent that all the personal allowances have been increased, so has the allowance for the blind or anybody else been increased. It is not a static allowance. Most people think that the blind allowance is the only one the blind get, but it is an exceptional additional allowance.
There will obviously come a time when it will be right to move allowances forward, but one cannot pick one allowance without paying due regard to others which tie up with it. We might have done it in any year—this year or any other—but this year we are asking everybody to exercise considerable restraint, and it is not the year one can pick out and say, "We shall be generous in the treatment of a particular category".
But that is a small part of the Clause. The main part is to introduce an allowance for the deaf, dumb and disabled generally as defined in the Clause. For the reasons I have given, I am sorry to say that nothing major has happened since this was debated and rejected by the Tory Administration, for the reasons which they gave. Our sympathies and views are united. We all want to help,


but the Clause would not give help in the way that it should be given.

Dr. M. P. Winstanley: I had not intended to intervene in the debate, but I should like to make a brief comment on the remarks of the hon. Member for Plymouth, Sutton (Dr. David Owen) and some of the Chief Secretary's observations on them. I agree with the hon. Member that there is a great need for integration of our taxation structure, social security benefits and so on. I also agree with him that there is a need for cash benefits for the disabled, and that it would be a great pity if we obscured this need by manoeuvring with taxation policy one way or another.
5.15 p.m.
It will not surprise the hon. Gentleman to know that I also support the aims of the Disablement Income Group, and I also view with suspicion attempts to remedy social injustices for minority groups by tax reliefs of one kind or another. Despite that—and I have risen for this point only—I think that there is a special case here which cannot be regarded as exclusive of the other matters but which should perhaps be looked at in itself.
I believe that those disabled who are fortunate enough to be able to work, and who I accept are more fortunate than many of their fellows, nevertheless work under difficulties which often cost them money in order to work at all. One can assess the difficulties they have over travelling, and sometimes about special meals, when they go to work. There is sometimes also a need for special clothing, whether it is the disabled person or the spouse who is working. There is the additional difficulty of added travelling time and problems of that kind which tend to make their working time longer in a sense than other people's.
We are all agreed in the Committee on the need to do everything possible to encourage the disabled to work, to make work attractive to them, and get them back into society in a constructive sense in a way in which they can make a genuine contribution. For the reasons I have given they are perhaps not deriving the full benefit of their work and not getting their full wages because they have to spend so much to be able to work

at all. Because of these difficulties there is a case for some recognition of the sort of principle embodied in the Clause.
I do not quarrel with the Chief Secretary's argument that it is wrong to single out for relief those who are perhaps better off that others, that this cannot be regarded as an exclusive operation. It is nevertheless right to point to an injustice if one exists.
I should have liked to hear the Chief Secretary recognise that disabled people work under difficulties, that they do not get the full benefit of their work and that this should be recognised in the tax system or by some other method. Had he said that, I would have been more satisfied with his arguments. It is true that we have a difference on a matter closely related to this. But I accept that he and his colleagues are anxious to do what they can to assist the disabled and see them playing a full part in the life of the community. I wish that he could have been more forthcoming about the Clause, despite any difficulties there may be in it in terms of definition. Had he said something more forthcoming, it would have been received very gladly by many disabled people and many of those who assist in getting them employment.

Dame Irene Ward: I particularly dislike the way in which the Chief Secretary dealt with the new Clause. It is very odd. Sometimes the Chief Secretary can be extremely nice and logical when he is refusing—

Mr. Diamond: On a point of order. Is it in order ever to say that a Chief Secretary can be nice?

The Chairman: I gather that the hon. Lady was only saying it by way of a preliminary to something else she was going to say.

Dame Irene Ward: I know you thought, Sir Eric, that I was going on to say one or two unpleasant things about the Chief Secretary, so I thought I had better preface them by saying something pleasant.
I can hardly accuse the Chief Secretary of having two sides to his nature, but I think that he has. I know that he must have been in real difficulty to refuse the Clause, and so he made his refusal in the most unpleasant terms. He has been long enough in the House of Commons to


know perfectly well that when one wants to put forward a case on behalf of a group of people, which is what we are doing here, one has to take every advantage one can.
For example, if one is advocating assisting the disabled through a reduction in taxation, one produces a Clause for the Finance Bill designed for that purpose. The right hon. Gentleman knows that perfectly well. If he will now tell us that he agrees with cash allowances and that he will implement this policy, I am sure that my hon. Friend the Member for Melton (Miss Pike) and all of us who support the Clause will be delighted to withdraw it in order to give him a chance to bring another system into operation.
My hon. Friend made it plain what her preferences were. The right hon. Gentleman knows very well also how we operate in Parliament. We put forward a case and build on it year after year. I always reckon that it takes ten years to win a battle, and it is very boring because a great many injustices could have been relieved in that time without having to fight on every front on all occasions.
The next most unpleasant feature of the way in which the Chief Secretary opposed the Clause was when he said that when we were in office we had refused a Clause exactly of this kind. Of course, he was entitled to point that out, but I did not always support the Conservative Government. I did quite a lot to try to move them along, and I was quite successful at times. No doubt they did refuse such a Clause. But I have been in political life for a very long time, and one thing I am proud about in the Tory Party, although sometimes I hit my colleagues pretty hard, is that it is careful when electioneering not to make the open promises about the remedying of social injustices such as are so often made by right hon. and hon. Members opposite, who lead people to believe that if they vote for the Labour Party it will be able to wave a magic wand and put right all social injustices. I do not think that I would have said this if the Chief Secretary had not been so unpleasant in the way he rejected the new Clause, but that is what happens, and no one knows it better than I do. Having electioneered eleven or twelve times, I know pretty well the form of the Labour Party during election campaigns,

and I am glad to be able to put this on record.
I never expected that we would get very much consideration or support from the right hon. Gentleman. I waited to hear what he had to say before intervening, because I prefer to make my case after he has made his rather than before. Whatever the Conservative Government did or did not do, the really tremendous pledges were given by the Labour Party in their election campaigns, and those who heard them would have been surprised to hear his argument today.
Up to a point, I think that the case put forward by the hon. Member for Plymouth, Sutton (Dr. David Owen) was very cogent. I also support the suggestion in relation to income for the disabled, and I would be delighted if the right hon. Gentleman would say unequivocally that these cash benefits for the disabled were to be given shortly.
As I have said, it is well known in the House of Commons that when one is campaigning for something one thinks to be right one must use every occasion to put it forward. The problem is to find, in our busy Parliamentary life, the occasions for advocating the kind of claims embodied in the Clause, and these come very rarely.
I can see that the problems of definition are very important, but the fact that we have the National Health Service, with many more records of disablement and all types of illness, which we did not have before, makes this kind of administrative difficulty very much easier to solve. I must refute the argument that because many people are not registered or because we do not know about many of them it is impossible to make a step forward. That is a ridiculous argument.
If we can get the right hon. Gentleman to support our case or the case for the cash benefits, which he also seemed to be rejecting—I am not certain because he was hopping about, as he always does, in the hope that he would not make his rejection of all these schemes too apparent to everyone—we now have all the modern techniques of radio and television to make the assistance known. We could surely have a series of programmes and could very easily get people to make their claims. There are also


the citizens advice bureaux and all sorts of other organisations that could help. Simply to say that we dare not go forward because it is difficult to find out certain things is most impracticable, unrealistic and absolutely stupid. I am tired of that argument.
The concession for the blind which my hon. Friend the Member for Plymouth, Devonport (Dame Joan Vickers) was instrumental in persuading the Conservative Government to give was accompanied by an undertaking that it would next be used as a springboard. That might have been what the right hon. Gentleman's predecessor said to my hon. Friend, but that did not bind me or any people who have come into the House of Commons since that day.
5.30 p.m.
It is a ridiculous argument, because all these matters of social justice do not attract in either party the support that they merit, which I think is regrettable. No one would give a pledge of that kind, whatever any Chief Secretary said on the Treasury Bench. That argument was used when I argued about equal pay for one of the HANSARD reporters. I was told by one of the right hon. Gentleman's predecessors that they would agree to it because the evidence was written down that she had been promised it, providing I did not use it as a springboard. I did not use it as a springboard, but I won the battle. All I am saying is that no one would give an undertaking to anybody on the Treasury Bench that if a concession is granted one would not use it when one comes to argue the general case again. It is a whole lot of nonsense.
What is the Chief Secretary proposing'? Will he support the claims that are put forward by the disablement income group? He did toss in the fact that he was not the Minister of Social Security. We know that, but we have to take every Minister in turn. I know that one cannot have one Minister and twist him or her every time. One has to twist every Minister that one can get at, and I am delighted to be able to get at the Chief Secretary. I would like to do three twists on him, whereas I would probably only do one twist on the Minister of Social Security, because she understands the

position much better than the Chief Secretary.
I do not want to get out of order on these matters of taxation, but I will use this particular instance because I used it yesterday in the Selective Employment Tax argument. If someone who is blind works for a voluntary body he gets the premium paid for him, but not if he works for a local authority. That is a monstrous injustice.
The Chief Secretary will no doubt get up and say that he would put that right straight away. But will he? Not on your life! He made a most deplorable and regrettable speech, and I hope that we have dozens of Clauses and dozens of opportunities and occasions when we can twist him and his party for giving such encouragement when electioneering and showing such a lack of understanding in implementing the pledges that were made. It is easy to make pledges. It is the redemption of the promises which is difficult. My complaint against my own party is that it did not make enough promises, but if it had it would have implemented them. My complaint about the Chief Secretary is that all these promises were made and we cannot get a tiny bit out of the Government.
I hope that when the Chief Secretary has finished his stint on the bench today he will feel thoroughly ashamed of himself, not necessarily for turning down the Clause—because I can understand he has arguments—but for the beastly, horrid way in which he did it.

Mr. Geoffrey Hirst: I only rise because I support all that has been said. I will not withdraw much of my support from the last speech of my hon. Friend the Member for Tynemouth (Dame Irene Ward). I have been very kind to the Chief Secretary this year, so I only say that I support my hon. Friend and will not repeat any of her remarks.
The Chief Secretary drew attention to the debate on 30th May, 1962, when about five Clauses were being debated together. I accept that there is a considerable relevance between those Clauses and this one. It does not quite match, but there is a relevance. Like all Chief Secretaries he does not vary much. He brought up the usual sort of argument—administrative difficulties, drawing the line somewhere and all the rest of it.
Chief Secretaries occasionally learn and Chancellors of the Exchequer occasionally learn, though not often enough, so I could not help turning up the debate, because I am always delighted to have my attention drawn to past occasions.
On 30th May, 1962, when this was being discussed, the then Shadow Chancellor of the Exchequer—the right hon. Gentleman who is Chancellor of the Exchequer today—dealt with this specific point. He said:
As to the administrative difficulties, I hope that the Chief Secretary"—
that was the Conservative one at the time—
will not rely on my support too much. I accept that there are administrative complications, but I do not accept, even if those complications cannot be set on one side, that they are of such a character that they ought to stand in the way of making these reforms. If I were in the position of the right hon. Gentleman I would make the reforms irrespective of administrative complications and tell the Inland Revenue to get on with them.
He concluded his speech:
I do not accept the administrative difficulties as overriding the will of the Committee when it has clearly expressed a wish that this should be done. I know that there are in the Inland Revenue people who are ingenious enough to overcome the difficulties, and I hope that the right hon. Gentleman will be able to come back to the Committee with a different answer."—[OFFICIAL REPORT, 30th May, 1962; Vol. 660, c. 1448–9.]
I support entirely the speech of the then shadow Chancellor of the Exchequer and I trust that it has been learned.

Mr. Bernard Braine: I would remind the Chief Secretary that although technically this debate is about tax allowances, it is also about people who have a harder battle in life than most. That was why I was disappointed at the way in which the Chief Secretary addressed himself to the subject. I was disappointed and saddened for two reasons. The first stems from the merit of the new Clause. Admittedly, it does not represent a major concession to the blind. It would not cost the Chancellor a great deal. Though it would provide an increase of 25 per cent. in the relief given to the blind in the Finance Act. 1962, the cost of living, as my hon. Friend the Member for Melton (Miss Pike) made plain, has risen by almost as much in the intervening period.
All we are seeking to do here is to restore the value of the concession which all parties thought it right to make five years ago to a particularly vulnerable group of our fellow citizens. The Chief Secretary said that one cannot pick out one allowance for special treatment. Why not? We are always doing it. What is the purpose of a Finance Bill? I would certainly give a conscious preference to groups such as the blind. If one accepts that there is a special obligation to help those afflicted by blindness, what we are proposing here is the least that we can do.
It is true that the Amendment goes further. It removes the distinction—

Mr. Diamond: I want to clarify one point. The hon. Gentleman keeps referring to the blind. As he knows, we are talking about the registered blind. He will also know that the Clause would benefit approximately 10 per cent. of the blind. The other 90 per cent. would not be affected at all.

Mr. Braine: If I had to spell out every term that I used and be precise to that degree, I would occupy a great deal more of the time of the Committee, and there is a great deal I intend to say. I hope that niggardly points of that kind will not affect the flow of my argument, but I will take them as they come.
I was about to say that the Clause goes further than that. It removes the distinction between people who are handicapped by blindness and those permanently disabled in other ways. I would that thought that that was in line with modern thinking, which is that help should be given where possible by the strong and the healthy to all who are severely disabled, irrespective of the nature or cause of their disability. I would have thought, that that would appeal particularly to the Socialist conscience of the right hon. Gentleman and his hon. Friends.
We all know that the distinction in the treatment the blind and those with other disabilities is historical. Blindness or even partial blindness is an obvious handicap. The blind Milton's anguished cry about darkness—
amid the blaze of noon, total eclipse
Without all hope of day.
conjures up an affliction which for centuries normally-sighted persons have been


able to comprehend. Thus it is not strange that blindness has always excited compassion. It is not surprising that it led to the provision of voluntary social effort long before the birth of the Welfare State.
I do not think that it is any disservice to those afflicted by blindness to say that the distinction between them and those seriously and permanently disabled in other ways is purely arbitrary and, in modern day conditions, unfair. Of course one cannot equate forms of disability. One cannot compare the loss of sight with the loss of hearing, the loss of limbs with the slow, painful and relentless advance of a crippling disease like multiple sclerosis, but who among us, with all the knowledge which we have of these things in our constituencies, can doubt the acute physical, psychological, social and financial difficulties experienced by all who suffer from varied forms of serious and permanent disablement?
What about the totally deaf, those who suffer from what Dr. Johnson described as one of the most desperate of human calamities? If the blind live in perpetual darkness, at least the air about them is filled with sound; they can communicate. The totally deaf are like persons cut off from contact with others. They look at the great world around them as through a glass panel but with endless difficulty in communicating, and because of that they receive scant sympathy from others who are simply unaware of their disability who are simply unaware that their disability exists.
What about those who suffer from one or other of the crippling diseases which restrict mobility, which involve much discomfort and intermittent pain and which so often end in complete dependence on others for satisfaction of the simplest needs? I am thinking of sufferers from epilepsy, paralysis, muscular dystrophy, sclerosis, multiple handicaps and various forms of mental illness. Inevitably in families where either the husband or wife is severely disabled, the fit partner has to shoulder not only added responsibilities in the home, which most of them accept gladly, but additional financial burdens for which, under our present arrangements, no relief is given. If there are children, outside help has to be

employed, and if help is unobtainable, the breadwinner may have to take a job with lower earnings in order to be at home for longer periods.
All of us know this to be so. All of us have had such cases brought to our attention. Sometimes it is necessary for the severely disabled partner to go into hospital and to stay there, not because he or she wants to, but simply because the breadwinner cannot afford to pay for help in the house. In such cases it would help to have the solution to which the hon. Member for Plymouth, Sutton (Dr. David Owen) referred—and I agreed with a great deal of what he said—and to have a constant attendance allowance payable, as in the case of the war disabled or the industrially disabled. Of course that would help, but at present no such allowance is made.
5.45 p.m.
The hon. Gentleman was quite right when he said that the disabled wife was at the core of this problem. But over the last two years the Government have rejected every suggestion which my right hon. and hon. Friends and hon. Members opposite have made to help her. The difficulties were clearly recognised in paragraph 201 of the Second Report of the Royal Commission on Taxation of Profits and Incomes. My hon. Friend the Member for Melton (Miss Pike) read a lengthy but very pertinent extract from that Report and I will not repeat anything which she said except to fix upon the Royal Commission's conclusion which was:
…that grave disability ought to be the subject of allowance. It presents itself to us as a personal circumstance that sets apart those who suffer from it and directly affects their relative capacity to pay. We do not mean that it affects their earning capacity. It may or may not, but so far as it does, the graduated scale of tax will diminish the burden on diminished earning power. What we are thinking of is a range of additional expense attendant upon the conduct of their normal life, not least upon the maintenance of their earning capacity, which yet goes unrelieved under the existing code.
We all know how true that is.
Let me give an example. One of my constituents, a middle-aged single woman, is badly crippled, having contracted poliomyelitis in childhood. She is unable to walk without crutches. She works in an office near her home at a salary


lower than her abilities would command if she could travel further afield. She is taxed on her earnings at a relatively high level, because she is a single person and has no dependants. This should bring home to the Chief Secretary the facts of life where these people are concerned. Because this woman is badly crippled, she has extra difficulty in running her home, but, as she is working, she cannot get any kind of home help. Because she is badly crippled, she cannot use public transport and has to take taxis to travel anywhere other than the very shortest distances. Because she cannot provide a garage space at her own premises, she is precluded by the regulations from having an invalid tricycle. Because she moves with difficulty on her crutches, her clothes wear out several times faster than those of a normally fit person. In the words of the Royal Commission her disability imposes on her
a constant levy of extra expense that may fairly be said to affect the taxable capacity
of her income. Yet she gets no tax relief.
The proposal on this Amendment would help people in that category. I do not know how many of them there are, but I know there are a number in my own constituency, and it is not many. We are told that there are administrative difficulties. The Chief Secretary rubbed this in. There may be, but those administrative difficulties are not insuperable. A good many of the severely and permanently disabled can be readily identified. Registered disabled workers are listed and known to the Ministry of Labour. The local welfare authorities are required under Section 29 of the National Assistance Act to maintain a register of persons who are substantially and permanently handicapped by injury, illness, congenital deformity, or such other disabilities as may be prescribed by the Minister. I know how many such persons there are in my own County of Essex. I can go to the county welfare officer and he will tell me exactly how many there are and from what disabilities they are suffering
Admittedly, there is a great dearth of knowledge about the state of the disabled. Last year, some of my hon. Friends and I pressed the present Minister of Social Security to do something about that, but, so far as I am aware, not very much has been done. But, in any event,

the Selective Employment Payments Act lays down a definition of disability—perhaps the right hon. Gentleman has forgotten this. Section 6(2) provides a refund for certain private households and these, for example, include
a person in need of such assistance … by reason of being infirm, sick, or otherwise incapacitated for any reason…".
The Government must have satisfied themselves that that was a satisfactory definition of incapacity for the refund, for they laid it down in the law.
The point is—and it will not be lost on the Committee—that if the will to do something exists, then a way will be found. What is quite clear from the speech of the Chief Secretary is that the will does not exist.

Dr. Owen: I agree with the main portion of the hon. Gentleman's speech in relation to this difficulty of assessing. This is the problem. The administrative difficulty is not in the Inland Revenue, it is in the assessment of disablement. But he is being less than fair to the Government. They have instituted quite a number of research proposals, particularly the one at Bedford College, sponsored by the Ministry of Health. Other surveys are in process, not enough, but something has been done. The will is beginning to be there.

Mr. Braine: I accept that some surveys are under way. The Government have been in office for nearly three years, and it is about time that we saw the fruits of some of these surveys and investigations about which we have been told so much.
We were then told that to increase this relief would be to limit the help that we can give to the better-off persons among the disabled. That, as I understand it, is the gravamen of the objection from the other side of the Committee—that we are not really helping the worst of the disabled because, by definition, we are only helping those who come within the tax bracket. That is the most extraordinary argument that I have ever heard. When we are discussing Finance Bills and tax allowances, it is inevitable that any Amendment can benefit only those persons who pay tax. Either there is a case for relieving people who are disadvantaged by their disablement, so that they can enjoy a little more of what is their own money, or not. The Chancellor


is not giving them anything. We are only saying that they should enjoy a little more of their own money.
The Royal Commission said that there was a case for this and one hon. Gentleman after another, speaking in this debate, has said that there is a case. To say that, because this new Clause cannot benefit all disabled persons it should not be accepted is, I suggest, to make nonsense of all tax allowances. One of my hon. Friends made it plain that some of the disabled were already helped. The war disabled and the industrial disabled are covered. But those who are incapacitated by accidents away from work or by disease, for example the disabled wife, are not covered. There is precious little fairness or equity in our present arrangements, and I challenge any hon. Gentleman opposite to deny this.
In any event, many of those who do not pay tax get help in other ways when they care for disabled relatives. They get free home help and Meals on Wheels. But the matter goes deeper than that. The right hon. Gentleman's argument presupposes that the Government are really anxious to help in other ways. They have been in office for nearly three years and all that we have heard in respect of these problems so far are words, vague promises, and a plethora of surveys.

Dr. Owen: This is absolute nonsense. The supplementary benefit has given considerable relief to those people who previously had been living on a very low level of income. The Government have given considerable reliefs.

Mr. Braine: The hon. Gentleman has completely missed the point. The Government have helped that category of people who are excluded from this particular Amendment. We are talking here about a category of people who, we think, can be helped by a tax concession. They are not rich people. Those that I know are people who are struggling desperately against odds. The hon. Gentleman is a medical man, and knows this to be the case. What will happen in the autumn when the new social benefits come to be paid is that the gap between the people the Government have helped, admittedly generously and correctly, and the people whom we are seeking to help will grow even wider.
These were not arguments used by the right hon. Gentleman the Chancellor or the President of the Board of Trade, or the right hon. Gentleman the Member for Sowerby (Mr. Houghton), who was, until recently, in charge of the social security arrangements of the Government, when they were in Opposition. That brings me to the other reason why I am disappointed and saddened by the Chief Secretary's reply. Some of us recall the passionate advocacy of right hon. Gentlemen opposite, especially the Chancellor, during the debate on the Finance Bill of 1962. I remember the eloquent plea of the right hon. Gentleman the Member for Sowerby One of the most significant remarks that he made in welcoming the then Conservative Chancellor's decision to grant relief in respect of the blind was that he thought we were at the turning point in this matter. He said that that concession, would:
…pave the way to an extension of this sort of relief."—[OFFICIAL REPORT, 2nd July, 1962; Vol. 662, c. 236.]
It has not done so. All these right hon. Gentlemen have held high office for nearly three years, and nothing has happened. What a gap between promise and performance! Even at this late hour, I ask the Chief Secretary whether it is possible that the Chancellor might have second thoughts on this. I do not ask him to stick to the actual words of the new Clause. Could the Chief Secretary rise and say whether the Chancellor, or he, would be able to say something further on Report about helping this deserving section of the community? I invite the Chief Secretary to rise and say whether anything will be said on Report.

Mr. Diamond: I have already made my speech and I do not want to deny the Opposition the right which it seems to seek on every Amendment of opening and closing. I, therefore, do not want to make another speech. I have drawn attention to the speeches that his right hon. and hon. Friends made during the time that he was in the Conservative Government; I have drawn attention to the fact that they gave nothing; I have drawn attention to the fact that what he is proposing will help those in this deserving category, who need help least of all in this deserving category. I have also drawn attention to the fact that he is proposing to help 10 per cent. of them. I


do not think that that is the best way of using public money.

Mr. Braine: In the face of that stubborn and unhappy reply, I can think of no better description of the right hon. Gentleman and his right hon. Friends than the words the wronged Catharine of Aragon used to describe Henry VIII:

"His promises were, as he then was, mighty; But his performance, as he now is, nothing."
I have no option but to ask my hon. Friends to divide the Committee.

Question put, That the Clause be read a Second time:—

The Committee divided: Ayes, 134, Noes, 176.

Division No. 367.]
AYES
[5.58 p.m.


Alison, Michael (Barkston Ash)
Gurden, Harold
Morrison, Charles (Devizes)


Allason, James (Hemel Hempstead)
Hall, John (Wycombe)
Mott-Radclyffe, Sir Charles


Astor, John
Hamilton, Marquess of (Fermanagh)
Marton, Oscar


Awdry, Daniel
Hamilton, Michael (Salisbury)
Noble, Rt. Hn. Michael


Bell, Ronald
Harris, Frederic (Croydon, N.W.)
Nott, John


Bennett, Sir Frederic (Torquay)
Harrison, Brian (Maldon)
Orr-Ewing, Sir Ian


Bessell, Peter
Harvey, Sir Arthur Vera
Osborne, Sir Cyril (Louth)


Biggs-Davison, John
Harvie Anderson, Miss
Page, Graham (Crosby)


Birch, Rt. Hn. Nigel
Hawkins, Paul
Page, John (Harrow, W.)


Blaker, Peter
Heald, Rt. Hn. Sir Lionel
Pike, Miss Mervyn


Boyd-Carpenter, Rt. Hn. John
Higgins, Terence L.
Price, David (Eastleigh)


Braine, Bernard
Hiley, Joseph
Prior, J. M. L.


Bromley-Davenport, Lt.-Col.SirWalter
Hirst, Geoffrey
Pym, Francis


Brown, Sir Edward (Bath)
Hogg, Rt. Hn. Quintin
Ramsden, Rt. Hn. James


Bruce-Gardyne, J.
Holland, Philip
Ridley, Hn. Nicholas


Buchanan-Smith, Alick(Angus, N&amp;M)
Hooson, Emlyn
Ridsdale, Julian


Buck, Antony (Colchester)
Howell, David (Guildford)
Russell, Sir Ronald


Bullus, Sir Eric
Hutchison, Michael Clark
Scott, Nicholas


Campbell, Gordon
Iremonger, T. L.
Sharples, Richard


Carlisle, Mark
Irvine, Bryant Godman (Rye)
Shaw, Michael (Sc'b'gh &amp; Whitby)


Carr, Rt. Hn. Robert
Jenkin, Patrick (Woodford)
Steel, David (Roxburgh)


Clegg, Walter
Johnson Smith, G. (E. Grinstead)
Tapsell, Peter


Cooper-Key, Sir Neill
Johnston, Russell (Inverness)
Taylor, Sir Charles (Eastbourne)


Costain, A. P.
Jopling, Michael
Taylor, Edward M.(G'gow, Cathcart)


Craddock, Sir Beresford (Spelthorne)
Kimball, Marcus
Taylor, Frank (Moss Side)


Crosthwaite-Eyre, Sir Oliver
King, Evelyn (Dorset, S.)
Teeling, Sir William


Crouch, David
Knight, Mrs. Jill
Temple, John M.


Cunningham, Sir Knox
Langford-Holt, Sir John
Thatcher, Mrs. Margaret


Dalkeith, Earl of
Legge-Bourke, Sir Harry
Thorpe, Rt. Hn. Jeremy


Dance, James
Lewis, Kenneth (Rutland)
Turton, Rt. Hn. R. H.


Davidson, James(Aberdeenshire, W.)
Lubbock, Erie
Vaughan-Morgan, Rt. Hn. Sir John


Dean, Paul (Somerset, N.)
McAdden, Sir Stephen
Wainwright, Richard (Colne Valley)


Doughty, Charles
MacArthur, Ian
Walker, Peter (Worcester)


Drayson, G. B.
Mackenzie Alasdair(Ross&amp;Crom'ty)
Walters, Dennis


Eden, Sir John
Macleod, Rt. Hn. Iain
Ward, Dame Irene


Elliott, R.W.(N'c'tle-upon-Tyne, N.)
McMaster, Stanley
Webster, David


Eyre, Reginald
Macmillan, Maurice (Farnham)
Wells, John (Maidstone)


Farr, John
Maddan, Martin
Whitelaw, Rt. Hn. William


Fletcher-Cooke, Charles
Marten, Neil
Wills, Sir Gerald (Bridgwater)


Galbraith, Hon. T. G.
Mawby, Ray
Winstanley, Dr. M. P.


Gilmour, Ian (Norfolk, C.)
Maydon, Lt-Cmdr. S. L. C.
Wood, Rt. Hn. Richard


Clover, Sir Douglas
Mills, Stratton (Belfast, N.)
Worsley, Marcus


Grant, Anthony
Mitchell, David (Basingstoke)



Gresham Cooke, R.
Monro, Hector
TELLERS FOR THE AYES:


Grieve, Percy
Montgomery, Fergus
Mr. Timothy Kitson and


Grimond, Rt. Hn. J.
More, Jasper
Mr. Bernard Weatherill.




NOES


Albu, Austen
Broughton, Dr. A. D. D.
Dell, Edmund


Anderson, Donald
Butler, Mrs. Joyce (Wood Green)
Dewar, Donald


Archer, Peter
Callaghan, Rt. Hn. James
Diamond, Rt. Hn. John


Armstrong, Ernest
Cant, R. B.
Dobson, Ray


Ashley, Jack
Carmichael, Neil
Doig, Peter


Atkinson, Norman (Tottenham)
Carter-Jones, Lewis
Driberg, Tom


Bacon, Rt. Hn. Alice
Chapman, Donald
Dunnett, Jack


Barnes, Michael
Coleman, Donald
Dunwoody, Mrs. Gwyneth (Exeter)


Barnett, Joel
Concannon, J. D.
Ellis, John


Beaney, Alan
Corbet, Mrs. Freda
English, Michael


Bennett, James (G'gow, Bridgeton)
Cronin, John
Ennals, David


Bidwell, Sydney
Crosman, Rt. Hn. Richard
Ensor, David


Bishop, E. S.
Dalyell, Tam
Evans, Ioan L. (Birm'h'm, Yardley)


Booth, Albert

Faulds, Andrew



Darling, Rt. Hn. George
Fernyhough, E.


Boston, Terence
Davidson, Arthur (Acorington)
Fletcher. Ted (Darlington)


Bowden, Rt. Hn. Herbert
Davies, Dr. Ernest (Stretford)
Forrester, John


Bray, Dr. Jeremy
Davies, Harold (Leek)
Fraser, John (Norwood)


Brooks, Edwin
Davies, Ifor (Gower)
Fraser, Rt. Hn. Tom (Hamilton)




Ginsburg, David
McBride, Neil
Price, William (Rugby)


Gourlay, Harry
McCann, John
Probert, Arthur


Gray, Dr. Hugh (Yarmouth)
MacColl, James
Rankin, John


Gregory, Arnold
MacDermot, Niall
Rees, Merlyn


Grey, Charles (Durham)
Macdonald, A. H.
Reynolds, G. W.


Griffiths, David (Rother Valley)
McKay, Mrs. Margaret
Richard, Ivor


Griffiths, Rt. Hn. James (Llanelly)
Mackenzie, Gregor (Rutherglen)
Robinson, W. O. J. (Walth'stow, E.)


Hale, Leslie (Oldham, W.)
Mackintosh, John P.
Roebuck, Roy


Hamilton, William (Fife, W.)
McMillan, Tom (Glasgow, C.)
Rose, Paul


Hamling, William
McNamara, J. Kevin
Ross, Rt. Hon. William


Hannan, William
Mahon, Peter (Preston, S.)
Rowland, Christopher (Meriden)


Harper, Joseph
Marquand, David
Ryan, John


Harrison, Walter (Wakefield)
Maxwell, Robert
Shaw, Arnold (Ilford, S.)


Haseldine, Norman
Mayhew, Christopher
Sheldon, Robert


Hattersley, Roy
Mellish, Robert
Silkin, Rt. Hn. John (Deptford)


Hazell, Bert
Mendelson, J. J.
Silverman, Sydney (Nelson)


Herbison, Rt. Hn. Margaret
Mikardo, Ian
Slater, Joseph


Hilton, W. S.
Millan, Bruce
Snow, Julian


Hobden, Dermis (Brighton, K'town)
Miller, Dr. M. S.
Stonehouse, John


Homer, John
Milne, Edward (Blyth)
Swain, Thomas


Houghton, Rt. Hn. Douglas
Mitchell, R. C. (S'th'pton, Test)
Swingler, Stephen


Hoy, James
Molloy, William
Taverne, Dick


Huckfield, L.
Moonman, Eric
Tinn, James


Hughes, Hector (Aberdeen, N.)
Morris, Alfred (Wythenshawe)
Tomney, Frank


Hughes, Roy (Newport)
Moyle, Roland
Urwin, T. W.


Hynd, John
Murray, Albert
Wainwright, Edwin (Dearne Valley)


Jeger,Mrs. Lena(H'b'n&amp;St.P'Cras,S.)
Norwood, Christopher
Walker, Harold (Doncaster)


Jenkins, Hugh (Putney)
O'Malley, Brian
Weitzman, David


Johnson, Carol (Lewisham, S.)
Oram, Albert E.
Wellbeloved, James


Johnson, James (K'ston-on-Hull, W.)
Orbach, Maurice
Whitaker, Ben


Jones, T. Alec (Rhondda, West)
Orme, Stanley
Whitlock, William


Judd, Frank
Page, Derek (King's Lynn)
Willey, Rt. Hn. Frederick


Kelley, Richard
Paget, R. T.
Williams, Alan (Swansea, W.)


Kerr, Dr. David (W'worth, Central)
Panned, Rt. Hn. Charles
Williams, Alan Lee (Hornchurch)


Kerr, Russell (Feltham)
Park, Trevor
Willis, George (Edinburgh, E.)


Lee, Rt. Hn. Frederick (Newton)
Parker, John (Dagenham)
Wilson, William (Coventry, S.)


Lestor, Miss Joan
Parkyn, Brian (Bedford)
Wyatt, Woodrow


Lipton, Marcus
Pavitt, Laurence



Luard, Evan
Pearson, Arthur (Pontypridd)
TELLERS FOR THE NOES:


Lyon, Alexander W. (York)
Pentland, Norman
Mr. Howie, and


Lyons, Edward (Bradford, E.)
Perry, Ernest G. (Battersea, S.)
Mr. Charles R. Morris.


Mabon, Dr. J. Dickson
Price, Christopher (Perry Barr)

New Clause No. 15.—(RELIEF FOR PERSONS OVER 65 WITH SMALL INCOMES.)

In section 13 of the Finance Act 1957 (Relief for persons over 65 with small incomes) as amended by section 10 of the Finance Act 1965, for the references to '£390' and '£625' there shall be substituted references to '£420' 'and £675'.—[Mr. Maurice Macmillan.]

Brought up, and read the First time.

Mr. Maurice Macmillan: I beg to move, That the Clause be read a Second time.

The Temporary Chairman (Mr. Thomas Steele): We can discuss at the same time new Clause No. 11 entitled "Interest from building societies"—
For the purposes of section 13(1)(b) of the Finance Act 1957 (Relief for persons over 65 with small incomes) interest from a building society, which has already borne tax in the hands of the society, shall not be included in the calculation of total income;
new Clause No. 52 entitled "Old people's income (income tax)"—
In the Income Tax Act 1952 section 211(2) and (3) shall be deleted and the following subsection inserted:—

'(2) The claimant, if he proves that at any time within the year of assessment either he or in the case of a married man his wife living with him was of the age of sixty-five years or upwards, shall be entitled to a deduction from the amount of income tax with which he is chargeable equal to tax at the standard rate of—

(a) two-ninths of the amount (up to a maximum of £4,005) of the claimant's income plus
(b) one-ninth of the amount (up to a maximum of £5,940) of any excess of his income over £4,005';
and new Clause No. 53 entitled "Old people's income (surtax)"—
For the purposes of charging surtax for the year 1967–68 or any subsequent year of assessment in section 14(1)(a) of the Finance Act 1961, the reference to subsection (1) of section 211 of the Income Tax Act 1952 shall be a reference to subsections (1) or (2) of that section of that Act.

Mr. Macmillan: The object of the new Clause is very simple. It is to raise the limit of relief from taxation for persons over 65 years of age with small incomes. New Clauses Nos. 52 and 53 are a separate issue, although they are closely related to the object of new Clause No. 15


dealing with the level at which the incomes of persons over 65 are taxed. New Clause No. 11 deals with a more specialised problem, and I am sure that the Committee would prefer to leave it entirely in the expert hands of my hon. Friend the Member for Norfolk, Central (Mr. Ian Gilmour).
New Clause No. 15 is precisely the same in all its terms as that which was moved last year by my right hon. Friend the Member for Thirsk and Malton (Mr. Turton). As it was drawn last year, it was rather wider than it is now because it extended the changes to the marginal provisions for those who were just excluded from total relief. This relief was originally given in 1957, and the level of full exemption was then £250 for a single person and £400 for a married couple. There were marginal provisions for graduated relief for £50 above the limit of total exemption. This year we have confined the new Clause to the full exemption limit. The marginal relief on the present system will obviously apply at a higher level altogether for the £50 above the proposed new relief.
I read the learned and complex arguments which my right hon. Friend the Member for Thirsk and Malton and the Financial Secretary put forward last year, but since they are not strictly relevant to this new Clause and this debate I merely ask the hon. and learned Gentleman if he would perhaps repeat the undertaking which he gave in column 180 of the OFFICIAL REPORT of 4th July, 1966, to see whether there was any way in which he could, as he put it, "soften the first stages" of the marginal relief which impinges rather heavily immediately above the total relief level.
Subsequent to the original introduction of this relief, changes were made by stages throughout the years. The last one was made in Section 10 of the Finance Act, 1965, when the limit was raised from £360 to £390 for a single person and from £575 to £625 for a married couple. When the Chancellor made the change, he said that it was clearly needed because of a general rise in the cost of living. In fact, he increased the figures by £30 and £50, respectively, above the previous year's levels. As my right hon. Friend said last year, even the increase in the cost of living more than justified a further raising of the exemption level. He

worked out that the correct arithmetical increase then would have been £32 for a single person and £52 for a married couple.
There has been a considerable rise in the cost of living since this extra relief was sought last year. Unless my arithmetic is wrong, the total relief for which we could ask now is something in the nature of £40 or more for a single person and getting on for £70 for a married couple. Even if my arithmetic is wrong, it is irrelevant, since all that the Clause seeks to do is to raise the levels by the same £30 and £50 for which we asked unsuccessfully last year. It is worth reminding the Committee that the cost of living has risen by some 3 per cent. since we made our request last year. Therefore, we are seeking no increase in real terms but are asking merely for the bare minimum needed to keep pace with inflation.
I hope that the Financial Secretary will not try to oppose the Clause on the grounds of cost. He said last year that it would cost some £8½ million in a full year, and presumably it is roughly the same today. If there is any change, clearly it is negligible. That figure is little more than the Government's overoptimistic estimate of the administrative cost of the Land Commission, which they said was £7½million, but it would be a very much more worthwhile way of spending public money.
In his speech last year, the hon. and learned Gentleman added:
…if this were a year in which my right hon. Friend was able to grant reliefs, this relief is one which would have a strong claim for review."—[OFFICIAL REPORT, 4th July, 1966; Vol. 731, c. 178.]
I would suggest to the hon. and learned Gentleman that that claim is even stronger today on all the arguments about the cost of living, the relatively small cost to the Treasury, on grounds of equity and social justice and, above all, on the ground that it meets the Chancellor's own criterion of being among the most deserving cases. What more deserving case can one make than for the over sixty-fives, who have spent a great deal of their working lives at a time when it was difficult to save, when earnings bore little relation to present-day living costs, and who find that any savings which they have made have been eroded by post-war inflation? However,


there is no exemption except below an equivalent level of something less than £8 a week for a single person and about £12 a week for a married couple.
6.15 p.m.
In effect, it means that, as the cost of living increases and as social benefits go up, these older people living on the income from their savings are bearing a higher proportion of the welfare benefits which in most cases they have never had the advantage of themselves.
There is a further reason why I hope that the Financial Secretary will be able to accept the new Clause, at any rate in principle. It is that it is time that a Labour Government introduced a Budget which had some relatively substantial social service relief, in view of his argument last year that in principle he would have accepted our request for a further concession if it had been possible economically. There has been no change since then to alter that view, and I hope that he will give serious consideration to this Clause and to the others which we are discussing with it.
New Clauses Nos. 52 and 53 have the object of raising what is known as the "age relief allowance". At present, if a claimant or his wife living with him is over 65, he has the right to have all his income treated as earned, provided that the total does not exceed £900 a year. It is important that the Committee should realise that it is the total and not the taxable income which is the criterion.
The last change in this concession was made four years ago in 1963, when the figure was raised from £800 to the present level of £900. That rise was needed to meet the increase in the cost of living, clearly, and it is equally clear that a further rise is needed this year to meet the cost of living increase which has occurred in the last four years. Taking January, 1962, as 100, the index shows that when the concession was last increased in April, 1963, the figure was 104. In April, 1967, it stood at 119·5. Even if the Chancellor cannot go the whole way and treat all income of people over 65 as earned income, I hope that we can have some indication that the Government will consider raising the rate.
Perhaps the Financial Secretary will bear in mind that it is the total income which provides the limit. No matter what marginal relief is given in other ways, even an income of £1,000 a year does not qualify at present and, nowadays, £1,000 a year is not as much as it used to be. If it were treated as earnings, it would represent retirement on half-pay with a salary of £2,000, which is not very large.
In the course of today's debates, we have heard about the need to encourage savings. I do not want to belabour the point unduly, but it is true that younger people today doubt whether saving is worth while. They have see the erosion of savings by rising prices, they have seen the fall in the value of many forms of lending to the Government, and they know that the record of the United Kingdom is bad compared with those of other countries. At a time when the tax system makes saving so difficult, just as economic circumstances made saving very hard for many people in the past, so it is necessary to encourage people to save by ensuring that the fruits of their savings can be enjoyed in old age.
As it is so difficult to get people to save now, it will mean that in the future those who are going to live on savings, even from relatively high earnings, will not have so much as they might otherwise have had. I know that we shall hear a great deal about the iniquity of helping the Surtax payer, but this suggestion is that those over 65 should be allowed to treat as earned up to the present level of Surtax of £5,000 a year their income from savings, and I think that in the present circumstances this is not an unusually ambitious request.
I confess that I have rather less hope of getting anywhere with new Clauses 52 and 53 than with this Clause, so I conclude with a special plea based on an additional factor operating this year. Last year my right hon. Friend the Member for Thirsk and Malton pointed out that the Pension (Increase) Act had brought into the tax range many people —married and single—who previously had been exempt. This is still true, but this year there is an additional factor, because we understand that pensions are to be raised. We do not know by how much. We do not even know


when. It is hard to be certain what one does know about this, since the Government have not seen fit to tell the House of Commons, but he preferred to allow the details, such as they are, to leak out to the Press.
I do not know—and I do not think anyone in this Committee can know—whether it will be necessary for the Government to raise the exemption level as we have suggested in the Clause, as previous Governments have had to do to match increases in the pension, to avoid bringing too many old people into the taxable category. Whether it is necessary or not he should do it, although the Chancellor has said that the relationship betwen the residual sum that is left to a man after he has earned his income and the allowance given by the State is tenuous. But in this case is not real; for in this case it is a relationship, not between beneficiaries as such but between taxpayers as such. Without this concession the burden which the increased pension must put on taxpayers as a whole will be proportionately higher and more burdensome on the elderly, since it is bound to bear more hardly on those whose incomes are fixed in money terms.
I would, therefore, be grateful if the Financial Secretary would tell the Committee of his intentions, even if he cannot yet give the amount. I hope that it will be this Committee, or this House, which will be informed, rather than that we have to wait for one of his right hon. Friends to announce it to the Press. But, even if it is done that way, I will forgive the hon. and learned Gentleman provided that he can persuade the Chancellor to make this long-overdue rise in the level at which old people start to pay tax.

Mr. Ian Gilmour: Mr. Steele, you have kindly ruled that new Clause 11 may be discussed in this debate. The purpose of our proposal is to relieve old people living on small incomes from paying tax on what they receive from building societies, as tax has already been paid on that money by the societies.
Under the present system, if a married person living on a pension of £625 a year receives £40 from a building society, he has to pay £18 by way of tax on that £40. It is true that he gets marginal

reliefs. If he did not, his tax bill would be £31.

The Financial Secretary to the Treasury (Mr. Niall MacDermot): Is the hon. Gentleman suggesting that such a person has to pay tax on the income he receives by way of building society interest? If he is, he is mistaken.

Mr. Gilmour: I do not want to go into the metaphysics of taxation, or to claim that such a person pays tax twice, because I am not certain that that would be a good point; and, anyway, I am not qualified to do it. The fact is, however, that he has to pay tax of £18 purely because he gets an income of £40 from a building society.
A constituent of mine does not quite fall into that category. He has an income of £624, and he receives £29 from a building society. He has to pay Income Tax of £13, which is nine-twentieths of the £29. He feels that this is unjust. Whether or not he is paying tax twice —and I would prefer to stick to the practicalities, rather than argue that issue —he feels that he is paying tax twice, and all the lucidity of the Financial Secretary, and all the tax experts in the world, will not convince people in that position that they are not paying tax twice over. What is certain is that tax is being paid twice as a result of receiving that income.
These people have small savings. They have small incomes, and it seems reasonable that the Government should grant this concession. If they gave way on this, they would do four things, all of which would be worth while. First, they would remove an undoubted sense of injustice amongst a small, but deserving, class of people. Secondly, and more important, they would remove the injustice, as it seems to me, of these people having to pay tax in this way. Thirdly, they would help to simplify the tax system and save the Inland Revenue the trouble of receiving irate letters from taxpayers who, understandably, do not appreciate the position. Fourthly, they would provide some well-needed help for people who in no sense can be said to be well off.
The only people who will be affected are those who are married and have incomes of between £625 and £800 a


year. I ask the Financial Secretary to accept the proposal.

Mr. R. H. Turton: New Clause No. 15 is an abbreviated form of a Clause which I moved last year, and I endorse the clear and cogent argument put forward by my hon. Friend the Member for Farnham (Mr. Maurice Macmillan).
I want to go a little wider, because in my view the taxation of the elderly is monstrously harsh today. It is so regarded not merely by the elderly, but by their neighbours who live near them. If a man who has never been within the tax scope, working in agriculture, for instance, enters the pension range and goes on working, he is suddenly harshly hit by huge taxation on Pay-As-You-Earn, which he cannot understand. We must either justify and explain that, or alter it. In my view we ought to make the basic pension tax-free, but I cannot pursue that point under the rules of order.
The Government ought to be considering this from every angle. I can see no argument which could be used in 1967 to reject new Clause 15. The cost of living and value of money argument was clearly put by my hon. Friend the Member for Farnham. On the merits, the Financial Secretary's argument last year is useless this year.
6.30 p.m.
However, there are two other arguments. We cannot put more of these people with the basic pension and small savings into the tax scope if we are raising the pension by £1 a week for a couple. The limits must, therefore, be raised by £50 a year. Because in view of the rise in the cost of living since the last increase, no Government could possibly give a pension rise of less, and I therefore assume that it will be £1. This problem is particularly hard for the elderly couple, as the wife of a working man before pension age can earn £1 10s. a week untaxed. This does not happen with aged pensioner couples. A man may go on working, but the wife never does and there is, therefore, no such source of untaxed income for them.
The proposed change is further necessary, particularly, in the light of the supplementary pension scheme introduced

this year. The Ministry of Social Security pamphlet, "New Benefits for Retired People", says that a married couple of retirement age will get a supplementary pension, if their income comes within the guaranteed weekly income level, of £7 2s. a week, plus rent. Assuming that their rent is 50s. a week, the guaranteed level would have to be £500.
Paragraph 4 of that pamphlet says that there is entitlement to supplementary pension even though the present weekly pension is higher than the guaranteed level, and continues:
This is because at least the first £1 of any income other than your retirement pension will normally be ignored as well as the first £2 of any part-time earnings.
Therefore, according to this pamphlet, a married couple would have a limit of £656 for entitlement to supplementary pension. Yet the present tax relief limit is £625.
Press reports show how worried everyone is about the disincentive to thrift. Of course, we must help those in need by a supplementary pension, but we must also try to put our tax scale well away from that so as to exempt from tax those on small incomes. It is the failure of both parties when in office for many years to understand the need to raise the exemption limit for old couples on basic pension and with small savings which has done more damage to their standing in the community than anything else.
They live in streets in which the average wage is £15 to £19 and they have the basic pension and small savings. They cannot understand these tax demands. They have put away savings pittances of £1 or £2 a week, and cannot understand why they should pay these tax demands when they are so out of line with the incomes in the rest of the street or village.
I therefore beg the hon. and learned Gentleman to consider this matter sympathetically and to accept the new Clause. I would ask him to get the Chancellor to make a thorough review of this problem, which would remove a great injustice felt by old people in all parts of the country and of all political persuasions.

The Temporary Chairman (Mr. Thomas Steele): The Question is—

Mr. MacDermot: I am sorry, Mr. Steele. I had assumed, wrongly, that I


would be listening to other representations before replying. I apologise.
We are discussing a number of Amendments which affect the tax position of the elderly. Most, but not all, deal particularly with those just above the age exemption limit. New Clause 15 is directed specifically at them and proposes to raise the limits.
Age exemption was introduced in 1957 to give special exemption to old people with an income just above the point at which they would normally have to start paying Income Tax. The original limits were £250 for a single person and £400 for a married couple, since when they have been increased five times and, on every occasion except one, the increase has been linked with and closely related to increases in the National Insurance pension. The exception was in 1964—I do not know whether the Opposition would hold that year up as a model which we should follow for managing the economy.
The argument for the increase is made first on the basis of increases in the cost of living and, more generally, by the right hon. Member for Thirsk and Malton (Mr. Turton) on the claim that taxation of the elderly is monstrously harsh. I am not sure that that criticism is well-founded if we compare the position of the elderly with the benefit of this exemption with that of single people on low incomes aged under 65.
The increases and movements of these exemption limits since 1957 compare favourably with the starting points for Income Tax for other people. The normal starting point for single people has risen since then from £180 to £283, whereas that for the aged single person has risen from £250 to £390. The starting point for married couples has risen from £309 to £438 and, for the aged married couples, with the exemption, from £400 to £625.
In contrast, the tax saved to elderly people who benefit from the exemption at the present limits, compared with that paid by people with the same income who are under 65, is £17 a year for a single person and £34 for a married couple. It has to be remembered that, although the elderly have their difficulties and sometimes added expenses, working people also have expenses for which they get no tax relief and which retired people do

not have, such as fares to work and National Insurance contributions. The increases in the limits have also kept up favourably with increases in ordinary personal allowances.
The case, then, is argued on the basis of the problems of elderly people on small incomes due to increases in the cost of living. As my right hon. Friend said in his Budget speech, the Government are very much aware of this problem, particularly as it affects the elderly, but the problem is greater still for those old-age pensioners with incomes below the present exemption limits.
I was asked for the cost of these proposals and the answer is close to the figures which I have given each year, as they go up only gradually with the increase in the proportion of elderly. The present figures show that the cost would be appreciable, £5½ million in the first year and £9 million in a full year, which is quite beyond what the Chancellor has felt able to grant in concessions this year.
As to Press reports that an increase in National Insurance pensions is pending, I am not answerable for what appears in the newspapers. When any decision is taken, an announcement will be made to the House by my right hon. Friend the Minister of Social Security. If such an announcement were made, that would, of course, have to be considered by my right hon. Friend in relation to these limits, because of the known and traditional link between the limit and the pension level—

Miss Pike: I should like to clear up that point. Is the hon. and learned Gentleman saying that this so-called leak about pensions is not true and that, as far as—

The Temporary Chairman: Order. We are not discussing that at the moment.

Mr. MacDermot: I thought that I had made it clear that I was not answer table for anything which appears in the newspapers. The hon. Lady could not expect to draw me on such matters even if it were within the rules of order.
New Clause 11 is the proposal to exclude building society interest from the computation of a taxpayer's total income for purposes of calculating the marginal age exemption relief. I stress that it is


a relief which is being calculated and not the addition of some liability to tax.
The purpose of the marginal age exemption relief is to avoid a big jump in tax liability when someone's income rises just above the age exemption relief which we have been discussing. Under the provision, it is restricted to nine-twentieths of the excess of income over the exemption limit, if that proves to be less than the liability computed by reference to the normal allowances and relief. It operates, therefore, only to the taxpayer's benefit, bearing in mind his normal tax liability, and it cannot add any liability.
To operate this one must look at the total income, including building society interest. The argument which is usually put forward for suggesting that this interest should be excluded is that, while other investment income—for example, dividends—is, it is suggested, treated favourably in that the taxpayer is given credit for the tax that is deducted at source, that does not apply to building society interest. It is suggested that, for that reason, there is some unfair treatment and that building society interest should be excluded from this calculation.
But this is only one of the consequences of the building society arrangement for a composite rate, which is greatly to the advantage of the building societies and, in general, to the people who invest in them. It is an essential feature of that arrangement that the investor first pays no Income Tax on his interest as he receives it and, secondly, cannot claim any tax repayment in respect of it.
It may be that the effect of this is not always to the advantage of people with small amounts to invest in that tax is deducted by the building society at the composite rate—at present 6s. 3d. in the £—before they receive their interest, and there may be better ways for some of them to invest their monies. But this is not due to the marginal age exemption provisions and, if the point be valid, it is not confined to people who are entitled to claim the exemption.
The object of the marginal age exemption is to give a tapering relief to elderly people whose incomes are a little above the limit for relief. If we are to operate this marginal age relief fairly as between different taxpayers within this band, we

must take into account all their income, including building society interest. To do otherwise would be unfair to other taxpayers who have incomes which do not include building society interest.
New Clauses 52 and 53 were discussed by the hon. Member for Farnham (Mr. Maurice Macmillan) with, I thought, a little less conviction than his remarks about new Clause 15, for these Clauses propose to abolish the distinction between earned income and unearned income for people over the age of 65, or for someone married to a person over 65, on the first £9,945 of their investment income. Out of the generosity of their hearts, hon. Gentlemen opposite want this to apply to Surtax as well as Income Tax.
The Committee will not be surprised to hear that this would be an expensive proposal. It would cost about £50 million in a full year, £30 million of that attributable to Income Tax and £20 million to Surtax. In present circumstances, the Committee may think that I hardly need say more. I certainly do not intend to rehearse, here and now, the well-known reasons for the distinction between earned and unearned income for tax purposes and for the existence of earned income relief.
When a somewhat similar proposal was put forward under the last Conservative Administration, my predessor in this office, the right hon. Member for Birmingham, Handsworth (Sir E. Boyle), in rejecting the proposal, stressed that it was important to retain the distinction which is implicit in earned income relief.
Those who argue in favour of this proposal argue from the principle of the age relief, a provision whereby the investment income of people of 65 or over whose total income does not exceed £900 a year is given the equivalent of earned income relief. But that is intended to equate the tax liability of a person who, in retirement, must live on a modest income from the investment of his savings with that of a retired taxpayer who lives on a pension which qualifies for earned income relief.
I cannot believe that hon. Gentlemen opposite seriously expect any concession on these lines, or that, if they were in power, they would dream of introducing it. It is not unfair to classify it as little more than a propaganda exercise, and I


do not believe that the people at whom it is aimed would be so foolish as to take it seriously. And I am sure that the Committee will not, either.

Question put, That the Clause be read a Second time:—

The Committee divided: Ayes 118, Noes 161.

Division No. 368.]
AYES
[6.52 p.m.


Alison, Michael (Barkston Ash)
Grieve, Percy
Murton, Oscar


Allason, James (Hemel Hempstead)
Grimond, Rt. Hn. J.
Noble, Rt. Hn. Michael


Atkins, Humphrey (M't'n &amp; M'd'n)
Gurden, Harold
Nott, John


Awdry, Daniel
Hall, John (Wycombe)
Orr-Ewing, Sir Ian


Bell, Ronald
Hamilton, Marquess of (Fermanagh)
Osborne, Sir Cyril (Louth)


Bennett, Sir Frederic (Torquay)
Hamilton, Michael (Salisbury)
Page, Graham (Crosby)


Bessell, Peter
Harris, Frederic (Croydon, N.W.)
Page, John (Harrow, W.)


Biggs-Davison, John
Harrison, Brian (Ma don)
Pike, Miss Mervyn


Boyd-Carpenter, Rt. Hn. John
Harvey, Sir Arthur vere
Price, David (Eastleigh)


Bromley-Davenport,Lt.-Col. Sir Walter
Harvie Anderson, Miss
Prior, J. M. L.


Brown, Sir Edward (Bath)
Hawkins, Paul
Pym, Francis


Bruce-Gardyne, J.
Heald, Rt. Hn. Sir Lionel
Ramsden, Rt. Hn. James


Buchanan-Smith, Alick(Angus,N&amp;M)
Higgins, Terence L.
Rees-Davies, W. R.


Buck, Antony (Colchester)
Hiley, Joseph
Rid8dale, Julian


Bullus, Sir Eric
Hirst, Geoffrey
Royle, Anthony


Campbell, Gordon
Hogg, Rt. Hn. Quintin
Russell, Sir Ronald


Carlisle, Mark
Holland, Philip
Scott, Nicholas


Carr, Rt. Hn. Robert
Hooson, Emlyn
Sharpies, Richard


Clegg, Walter
Hutchison, Michael Clark
Shaw, Michael (Sc'b'gh &amp; Whitby)


Cooper-Key, Sir Neill
Iremonger, T. L.
Taylor, Sir Charles (Eastbourne)


Costain, A. P.
Jenkin, Patrice (Woodford)
Taylor, Frank (Moss Side)


Craddock, Sir Beresford (Spelthorne)
Johnston, Russell (Inverness)
Teeling, Sir William


Crosthwaite-Eyre, Sir Oliver
Jopling, Michael
Temple, John M.


Crouch, David
Kimball, Marcus
Thatcher, Mrs. Margaret


Cunningham, Sir Knox
King, Evelyn (Dorset, S.)
Turton, Rt. Hn. R. H.


Dalkeith, Earl of
Knight, Mrs. Jill
Vaughan-Morgan, Rt. Hn. Sir John


Davidson, James(Aberdeenshire, W.)
Langlord-Holt, Sir John
Wainwright, Richard (Colne Valley)


Dean, Paul (Somerset, N.)
Lubbock, Eric
Walker, Peter (Worcester)


Deedes, Rt. Hn. W. F. (Ashford)
McAdden, Sir Stephen
Ward, Dame Irene


Doughty, Charles
MacArthur, Ian
Weatherill, Bernard


Drayson, G. B.
Mackenzie, Alasdair(Ross&amp;crom'ty)
Webster, David


Eden, Sir John
Macleod, Rt. Hn. Iain
Whitelaw, Rt. Hn. William


Elliott, R. W. (N'c'tle-upon-Tyne,N.)
Macmillan, Maurice (Farnham)
Wills, Sir Gerald (Bridgwater)


Eyre, Reginald
Maddan, Martin
Wilson, Geoffrey (Truro)


Farr, John
Mawby, Ray
Winstanley, Dr. M. P.


Fletcher-Cooke, Charles
Maydon, Lt.-Cmdr. S. L. C.
Wood, Rt. Hn. Richard


Galbraith, Hon. T. G.
Mills, Stratton (Belfast, N.)



Gilmour, Ian (Norfolk, C.)
Monro, Hector
TELLERS FOR THE AYES:


Glover, Sir Douglas
More, Jasper
Mr. David Mitchell and


Grant, Anthony
Morrison, Charles (Devizes)
Mr. Timothy Kitson.


Gresham Cooke, R.
Mott-Radclyffe, Sir Charles





NOES


Albu, Austen
Davies, Dr. Ernest (Stretford)
Hamling, William


Anderson, Donald
Davits, Harold (Leek)
Hannan, William


Archer, Peter
Davies, Ifor (Gower)
Harper, Joseph


Armstrong, Ernest
Dell, Edmund
Harrison, Walter (Wakefield)


Ashley, Jack
Dewar, Donald
Haseldine, Norman


Atkinson, Norman (Tottenham)
Diamond, Rt. Hn. John
Hazell, Bert


Bacon, Rt. Hn. Alice
Dobson, Ray
Herbison, Rt. Hn. Margaret


Barnes, Michael
Dunnett, Jack
Hilton, W. S.


Barnett, Joel
Dunwoody, Mrs. Gwyneth (Exeter)
Hobden, Dennis (Brighton, K'town)


Beaney, Alan
Ellis, John
Homer, John


Bidwell, Sydney
English, Michael
Houghton, Rt. Hn. Douglas


Bishop, E. S.
Ensor, David
Howie, W.


Booth, Albert
Evans, Ioan L. (Birm'h'm, Yardley)
Hoy, James


Boston, Terence
Faulds, Andrew
Huckfield, L.


Bowden, Rt. Hn. Herbert
Fernyhough, E.
Hughes, Hector (Aberdeen, N.)


Brooks, Edwin
Fletcher, Ted (Darlington)
Hughes, Roy (Newport)


Broughton, Dr. A. D. D.
Forrester, John
Hynd, John


Butler, Mrs. Joyce (Wood Green)
Fraser, John (Norwood)
Janner, Sir Barnett


Callaghan, Rt. Hn. James
Fraser, Rt. Hn. Tom (Hamilton)
Jeger, Mrs.Lena'H'b'n&amp;St.P'cras,S.)


Cant, R. B.
Freeson, Reginald
Jenkin, Hugh (Putney)


Carter-Jones, Lewis
Gardner, Tony
Johnson, Carol (Lewisham, S.)


Chapman, Donald
Ginsburg, David
Jones, T. Alec (Rhondda, West)


Coleman, Donald
Gourlay, Harry
Judd, Frank


Concannon, J. D.
Cray, Dr. Hugh (Yarmouth)
Kelley, Richard


Corbet, Mrs. Freda
Gregory, Arnold
Kerr, Dr. David (W'worth, Central)


Craddock, Sir Beresford (Spelthorne)
Griffiths, David (Rother Valley)
Kerr, Russell (Feltham)


Cronin, John
Griffiths, Rt. Hn. James (Llanelly)
Lee, Rt. Hn. Frederick (Newton)


Dalyell, Tam
Hale, Leslie (Oldham, W.)
Lestor, Miss Joan


Davidson, Arthur (Accrington)
Hamilton, William (Fife, w.)
Lipton, Marcus




Luard, Evan
Murray, Albert
Rowland, Christopher (Meriden)


Lyon, Alexander W. (York)
Norwood, Christopher
Ryan, John


Lyons, Edward (Bradlord, E.)
O'Malley, Brian
Shaw, Arnold (Ilford, S.)


McBride, Neil
Oram, Albert E.
Sheldon, Robert


MacColl, James
Orbach, Maurice
Silkin, Rt. Hn. John (Deptford)


MacDermot, Niall
Orme, Stanley
Silverman, Julius (Aston)


Macdonald, A. H.
Page, Derek (King's Lynn)
Silverman, Sydney (Nelson)


McKay, Mrs. Margaret
Paget, R. T.
Swain, Thomas


Mackenzie, Gregor (Rutherglen)
Pannell, Rt. Hn. Charles
Swingler, Stephen


Mackintosh, John P.
Park, Trevor
Taverne, Dick


McMillan, Tom (Glasgow, CO
Parker, John (Dagenham)
Tomney, Frank


McNamara, J. Kevin
Parkyn, Brian (Bedford)
Urwin, T. W.


Mahon, Peter (Preston, S.)
Pavitt, Laurence
Walker, Harold (Doncaster)


Mallalieu, E. L. (Brigg)
Pearson, Arthur (Pontypridd)
Weitzman, David


Marquand, David
Pentland, Norman
Wellbeloved, James


Maxwell, Robert
Perry, Ernest G. (Battersea, S.)
Whitaker, Ben


Mayhew, Christopher
Price, Christopher (Perry Barr)
Whitlock, William


Mellish, Robert
Price, William (Rugby)
Willey, Rt. Hn. Frederick


Mikardo, Ian
Probert, Arthur
Williams, Alan Lee (Hornchurch)


Millan, Bruce
Rankin, John
Willis, George (Edinburgh, E.)


Miller, Dr. M. S.
Rees, Merlyn
Wilson, William (Coventry, S.)


Milne, Edward (Blyth)
Reynolds, G. W.
Wyatt, Woodrow


Mitchell, R. C. (S'th'pton, Test)
Richard, Ivor



Molloy, William
Robinson, W. O. J. (Walth'stow, E.)
TELLERS FOR THE NOES:


Morris, Alfred (Wythenshawe)
Roebuck, Roy
Mr. John McCann and


Moyle, Roland
Ross, Rt. Hn. William
Mr. Charles Grey.

New Clause 21.—(RELIEF IN RESPECT OF MINERAL ROYALTIES.)

(1) Where a royalty or other sum to which section 169 or 170 of the Income Tax 1952 applies is paid in respect of the working of any mine or other source of mineral deposit, the person receiving the payment shall be entitled, for any year of assessment in respect of which such payment is made—

(a) to an allowance in respect of the depletion of the mine or other source of mineral deposit, the allowance being equal to the fraction mentioned below of the payment so made in that year, that is to say—

(i) where the first working of the source to which the payment relates was less than ten years before the end of the year of assessment, one-half;
(ii) where that first working was less than twenty years but not less than ten years before the end of the year of assessment, one-quarter;
(iii) in any other case, one-tenth; and

(b) to claim the like relief as he would be entitled to claim by virtue of the provisions of Schedule 6 to the Finance Act 1963 if the payment were a premium required under a lease the duration of which is the period over which the right to work the mine or other source has been granted, and as if the chargeable sum, for the purposes of that schedule, were the amount of the payment after deduction of the allowance referred to in paragraph (a) of this section:

Provided that no claim shall be made under this paragraph unless the income of that person from such payments in the year of assessment exceeds by more than thirty per cent. the annual average of such income in the preceding four years.

(2) Any allowance or relief under this section shall be made or granted by repayment of tax or otherwise.—[Mrs. Thatcher.]

Brought up, and read the First time.

The Deputy Chairman (Mr. Sydney Irving): With this new Clause we may discuss new Clause 30, entitled—"Nonferrous metal mines in United Kingdom":

(1) The profits of a trade commenced after the passing of this Act and consisting of or including the working of a non-ferrous metal mine situated within the United Kingdom being profits arising from the working of the mine and so arising during a period of 36 months beginning with the day on which the mine is first brought into commercial operations shall be exempt from the corporation tax.

(2) For the purpose of this section a mine shall be deemed to be brought into commercial operation as soon as substantial quantities of ore are extracted from the mine for any treatment and for disposal and such substantial quantities shall not be taken to include ore extracted in the course of searching for, discovering or testing mineral deposits, or winning access thereto.

Mrs. Margaret Thatcher: On a point of order, Mr. Irving. We would appreciate it very much if we could have a separate Division on new Clause 30.

The Deputy Chairman: Yes, the Chair has agreed that it is possible. It will be taken, of course, when we come to that new Clause in the Notice Paper.

Mrs. Thatcher: I beg to move, That the Clause be read a Second time.
The Clause is concerned with the taxation of minerals and mineral rights. This subject has been frequently discussed, and over the last 20 years there have been many changes in the legislation relating to it. During those discussions analogies have often been drawn between mineral rights and other forms of property, and I


stress at the very outset that there is no parallel at all to a lease over mineral rights. There are certain other transactions that have characteristics in common with the lease on mineral rights, but there is no strict parallel.
When one gives a right to work minerals one is giving a person the right to consume that mineral, not to use it, but to consume it—to use it up completely, so that it disappears. One is selling a capital asset in parts, and parts are being used up year by year. I stress that aspect now even though I shall probably call in aid analogies with certain other transactions, but I will know that they are not complete. I know that the Chief Secretary will probably equally call in aid analogies which I shall not consider complete. So, at any rate, we will start on a similar basis in that respect.
The history of the subject is that, originally, capital allowances were given only for the actual working of the mine or the working of the mineral right—the operation of extracting the mineral. They were not given for the acquisition of the mineral at all. After 1955, when the Royal Commission had reported, a further change was made which was embodied in the 1963 Finance Act. That is, I believe, the last time this matter was extensively discussed. Then, for the first time, a depletion allowance was given in respect of the minerals themselves. It was given to the operator who was extracting those minerals for sale or for use.
There have since been many changes in the taxation system, a number of which are relevant. I need scarcely remind the Chief Secretary that a full Capital Gains Tax was introduced in 1965, we have just had through the House the development levy, and we have just made changes in the Finance Bill relating to the capital levy. The ownership of minerals is concerned with the Capital Gains Tax and, particularly when the right is given to work minerals, with the development levy. Both of these are capital taxes. One would have expected and hoped for some relief from the full rigours of taxation on those who had minerals and let them out to operators to be used up. One would have hoped that there would have been some corresponding tax relief to the new very considerable tax penalties that have been imposed.
This Clause is concerned, first, to treat part of the royalty payment as subject to a capital allowance. My thesis there is that the entire mineral is capital, and that when the mineral operator extracts part of it the initial capital, as such, is being depleted and, therefore, at any rate part of the payment which the operator makes to the owner should be treated as capital. The operator is not using the mineral, but is using it up.
That is why I say that the use of minerals is quite different from the use of any other asset. When one has used the minerals there is nothing to hand back—they have gone—so the operator in using them up makes certain payments to the owner, part of which, in the hands of the owner, we feel should be treated as capital and should therefore be subject to a depletion allowance. When the suggestion was made in 1963 a number of answers were given from the Treasury Bench and, naturally, I shall have to examine their validity.
The second limb of the new Clause is concerned with spreading the royalty income over a number of years. This is where analogies come in with which I am sure the Chief Secretary will be familiar. There are a number of assets which can produce moneys coming in, which moneys do not come in evenly, but in one year are concentrated with, perhaps, not so much coming in another, with a lot again in a third year. Patent rights can produce that effect, and so can copyright and a number of other things. There are provisions in the taxing Acts for spreading that income over a number of years.
In the working of mineral assets it so often happens that one can get a very concentrated amount of money during one year. Sand and gravel is a good example. The workings of the assets occur quickly, and then the operator moves on to other sources. One can thus get a great concentration of royalties which gives a very high taxable capacity during one year, and a very high tax liability during one or two years.
There are, therefore, two parts to the Clause, one seeking to treat part of the royalty as a depletion allowance because the asset is being used up as a kind of capital payment, and the other being to


spread the income allocation over a period of years—preferably over the time that the mine is being worked.
The capital suggestion was first raised in the Finance Act of 1963, when my hon. Friend the Member for Ludlow (Mr. More) made, if I may say so, an excellent speech which I can adopt in almost every particular. In fact, I confess that I would rather take his speech than the answer from the then Treasury spokesman. Then I go to the new position and see how it has changed; and whether and how I can succeed in introducing some doubt in the mind of the Chief Secretary about the validities of the replies given on that occasion.
That debate took place on 26th June. 1963, and the answer was given by the then Economic Secretary to the Treasury. He seemed to base his arguments on a number of propositions. The first one he related to the specific Clause then under discussion to which this Amendment was made. He said this:
Relief under Clause 37 is at present limited to a person carrying on the trade of working a source of United Kingdom minerals who incurs capital expenditure on its acquisition….the total relief … is limited to the net cost of acquiring the source.
There are two things there. The first is that the relief was limited to the operator. That we know and are seeking to extend. The other argument seemed to be that relief would attach only to a person who had spent money on acquiring the asset. Therefore, it would be assumed that a mineral owner who had not spent money on acquiring the mineral asset, but who was just realising it as an asset was not entitled to a depletion allowance, which is a capital allowance.
First, we are seeking to extend it to the person who has an asset and who lets it out. So the fact that Section 37 was on a more limited scale does not apply here. The second point is that the other argument is true, namely, that a capital allowance applies only to a person who has spent the money. It would follow that a person who did spend money on purchasing mineral assets as an investment should be entitled to a capital allowance because he had incurred the expenditure. That argument could be turned against the person who made it.
There is another reason why I would not accept that particular argument. As the Chief Secretary knows, the right to capital allowances is not limited to the person who incurred the expenditure. Capital allowances are given to the person who has the relevant interest. The relevant interest may pass from the person who incurred the expenditure to a second party by means other than by purchase. So I hope I have made it clear that I would not accept that there was very much logic or good reason in that argument.
The second reason which was advanced against the capital section of this proposal was that the owner merely allows the operator the
temporary use of an asset which he owns in return for income".
It was because of this reason that I spent a little time at the beginning of my comments on stressing that this is quite a different transaction from merely letting somebody else use the asset and its then being handed back. It is quite different. The owner is not allowing somebody to use the asset. He is allowing somebody to consume it and use it up so that at the end there is nothing of that mineral to hand back.
Therefore, I would not accept that argument anyway. What happens is that the operator has the right to use the surface of the land so that he may extract the mineral and use up the mineral from the land. The income element, therefore, would go to the use of the surface of the land and the capital element would go to what he was purchasing from the land. I could not possibly accept that second reason.
The third reason for rejecting the Amendment then put forward was that there are no grounds for making an allowance for
a wasting asset simply because it wastes".—[OFFICIAL REPORT, 26th June, 1963; Vol. 679, cc. 1490–91.]
If that were the argument which was being advanced, I would agree, because there are a number of things—certain industrial buildings, certain commercial buildings—which do not attract the allowances and which could be said to be wasted, but I fail to see how it can be said that a mineral asset wastes away. It does not just waste away. It is positively extracted, to be used for positive


purposes. It is not a question of wasting away in any regard.
Perhaps this argument came from the very extensive mineral deposits of coal which were usually the subject of taxation and of tax legislation in the early history of working minerals. Coal is one thing, perhaps, which we are not considering on the Amendment, for obvious reasons. But a mineral asset does not waste. It is positively used.
7.15 p.m.
Perhaps I may here invoke another analogy. Even industrial buildings which are subject to particular vibration—they do not normaly waste, but they are subject to some vibration because of some particular energetic process or dynamic process taking place within their walls—have special capital allowances because it is not merely wastage. It is some positive use of the asset which attracts the capital allowance. So I could not accept that argument as being a valid one for rejecting the Amendment either.
The fourth argument, or the fourth thing just thrown in by the way, seemed to be that most leases gave restoration provisions anyway and therefore—I am not sure that there was any "therefore." That was just a gratuitous piece of information, or perhaps it would have gone on to say that the land was handed back. But the mineral asset could not be handed back, because it had gone. The land was handed back, often restored, because, as the Chief Secretary knows, there is a restoration levy in respect of these things.
In fact, the restoration levy on royalties in respect of ironstone works, for example, in pre-war leases could amount to as much as 50 per cent, of the actual royalty payment. The land was handed back. That for which the royalty was mainly paid—the mineral—could not be handed back. The land was handed back. Often its current use value has been reduced for a number of years, because, although it may apparently be restored to agricultural use, it cannot possibly come up to full agricultural use for a number of years. I do not make any particular play with that, because that would be a matter for Capital Gains Tax and, perhaps, adjustment of development levy. For these reasons, I do not think that the view advanced by the Economic Secretary in 1963 consisted of reasons

such that I could accept them for the time being.
The other section of the Amendment is that which asks for averaging. Frequently in the working of minerals, particularly sand and gravel, as I have said, a lot of moneys come in over a short time. It seems very unfair indeed to tax them as the entire income or capital in one particular year. The form of averaging selected in the Amendment is about equivalent to the kind of averaging or spreading which occurs in a premium for a lease. There is also spreading in patent cases. In patent cases there is both the capita] allowance and the spreading of income. I know that it is not entirely on all fours, but this case warrants on its own some spreading over a number of years.
I mentioned earlier that there have been a number of changes since 1963, of which the development levy is one. The development levy falls very heavily indeed on those who let out or lease their mineral rights. As the Chief Secretary knows, the levy is calculated at the beginning of the lease and is payable before a single royalty has been paid. So even the capital element of the royalties which I am proposing the Chief Secretary should give would be used up to pay the development levy. It would not go scot-free by any means, if the Chief Secretary is worried about that.
At the moment, the mineral owner is liable to very heavy tax indeed—Capital Gains Tax, a heavy development levy, Income Tax and Surtax, and often a restoration levy. Indeed, there are cases where the net amount received from the sale of the minerals is less than the outgoings in tax and restoration levy, so high is it at the moment.
I therefore hope that the Chief Secretary will think of giving some particular relief, either on capital lines, or along income spreading lines, or preferably on both. I need scarcely tell the right hon. Gentleman, because he is used to dealing with taxation on land matters, that land law in this country has always provided for the capital content of mineral royalties. The Chief Secretary must know, from the many trusts and settlements he must have handled tax-wise, that, if a tenant for life is entitled to money from the workings of minerals, he is not entitled to it all as income.
Twenty-five per cent. must go to the trustees, because that portion belongs capital-wise to those entitled in remainder. In the United States depletion allowances are given to owners as well as to mineral operators.
I do not wish to delay the Committee for an undue length of time. I hope that the Chief Secretary will not advance the arguments which were advanced in 1963. I hope that I have said enough to make him realise that I do not fully accept them. Considerable taxation has been imposed since then for which there has been no corresponding relief, and this alters the whole picture.
I shall not deal with the other new Clause, because I know that some of my right hon. and hon. Friends, particularly those from the West Country, have special arguments to advance, and they will do it more cogently than I can.

Mr. John Nott: I fully agree with what my hon. Friend the Member for Finchley (Mrs. Thatcher) said about new Clause 21 and the reasons which she advanced in support of it. If I use the term "wasting asset" in what I have to say, I hope that she will appreciate that I agree entirely with her definition. In the case of minerals, one is speaking of a substance which is actually consumed, which is very different, as she rightly said, from the wastage on land and certain types of building. I shall, however, use the term "wasting asset", doing so in the way which she defined it as an asset which is consumed.
I shall address myself to new Clause 30, "Non-Ferrous metal mines in the United Kingdom". Hon. Members will recognise this new Clause. It has, I believe, been tabled on every Finance Bill each year since 1961, when it was moved by the right hon. Gentleman the present Prime Minister, then in opposition. Although the right hon. Gentleman originally proposed it, we have seen no action on on it since the present Government came to power, but I hope that we shall not need to divide on new Clause 30, as I have every hope that the Chief Secretary will accept the arguments which I shall put.
The arguments in favour of a concession of this kind have been often stated in the House, so I shall be brief.

During the last century, this country produced a substantial proportion of the world's tin and about half its copper. We are not suggesting for a moment that it could ever produce enough to make this country anything life self-sufficient in tin again. Britain now imports about 95 per cent. of its tin requirements, and, even if new Clause 30 and the one proposed by my hon. Friend were accepted, the percentage which this country would produce for itself would be raised by only a small amount. Nevertheless, the development of our natural resources, which at present lie fallow and unused, could do at least something to lessen our dependence on imported minerals, to the benefit of our balance of payments.
Tin affords the most striking example of my case, and I shall direct my argument to tin. Cornwall has one of the very few undeveloped areas of tin mineralisation in the world. There is a serious world shortage of tin, and the price fluctuates widely. In fact, the price of tin is only held relatively stable at present by releases from the United States stockpile.
When this stockpile runs out, which it is likely to do in the early 1970s, the price of tin will almost certainly rise astronomically, and this country could have an insufficient supply of this material because the main tin producing areas of the world are in relatively politically unstable parts. Moreover, it is difficult to envisage substitution for tin in the way in which, for example, there can be substitution for oil and other materials.
At present, Union Corporation, Consolidated Gold Fields and Guggenheim Exploration, some of the greatest mining houses in the world, are prospecting for tin in Cornwall. These great international mining houses are able to prospect in most countries of the world. They recognise that tin is there in Cornwall, but they almost unanimously agree that at present the incentive is not there to mine it.
The world is, as it were, an oyster for these companies. They can go anywhere. But they know that, although the gross cost of extracting tin from Cornwall is fairly comparable with that in any other country in the world, the net costs, after taxation, of extracting this mineral out of the Cornish granite is very much


greater than in most other countries. The reason is to be found purely in our taxation system.
Practically every other country in the world—this goes for the United States, Australia, Canada, Ireland and South Africa—has the type of depletion allowances which my hon. Friend mentioned in connection with Clause 21, and a number of them have the type of tax holiday which we propose in new Clause 30. Eire, for instance, now has a 20-year tax holiday. I am not suggesting that the Treasury would ever agree to that, but that is the arrangement in Eire, and Consolidated Gold Fields, Union Corporation and the other mining companies are free to exploit minerals there. Canada—I sent the Canadian income tax laws to the Chancellor about four months ago, with the relevant sections underlined—has a three-year tax holiday similar to that which we suggest here, and it also has substantial depletion allowances along the lines proposed by my hon. Friend.
Taking the position on a discounted cash flow basis and comparing Canada, the United States, the United Kingdom and other countries, we find that the taxation arrangements in Britain are, almost without exception, far worse than in any other country of the world. That is the simplest example one can take to show how adversely the United Kingdom tax system bears upon a particular industry. An O.E.E.C. report a few years ago on mineral legislation in Europe said that Great Britain
would seem to have the best developed negative attitude towards metal mining of all the O.E.E.C. countries.
Thus, that official report confirmed that our negative attitude towards the exploitation of minerals in Britain far surpasses that of any other country of Europe.
We do not by the new Clause involve the Treasury in its nightmare of precedent. We know how frightened it is of creating a precedent. What we suggest will not lead to a precedent and will not lead to widespread demands for tax holidays from other industries. We propose putting mining operations on a taxation footing similar to that for other comparable wasting assets. I shall later explain how I define a comparable wasting asset.
The sinking of a shaft and exploration through granite involves immediately a

huge loss of capital if tin is not discovered in recoverable quantities. Where tin is found, the capital is lost over a relatively short period by depletion of the wasting asset, by consumption of the tin. As my hon. Friend said, there is no ground whatever for comparing mining and non-ferrous metal exploration of this nature with land or with buildings. There is no comparison between industry and commerce and mining and mineral depletion.
The only conceivable comparison—I suspect that the Chief Secretary may try to use it—is with natural gas and oil exploration in the North Sea. I can imagine the Treasury being fearful of demand from the North Sea companies following a tax holiday granted to nonferrous metal mining. But I dissent even from that comparison and assert that non-ferrous metal mining is in a position quite different from that of mineral exploitation on the Continental Shelf.
The difference between tin and oil exploration and, more especially, natural gas exploration is that tin is not persistent in its incidence. The lodes are extremely narrow and very spasmodic. This is shown by the fact that the two working mines in Cornwall, which have been working for 60 years, have never known for more than three years ahead that they had sufficient reserves to continue working. In other words, the tin is extremely spasmodic, it is non-persistent, it is found scattered over a wide area, and in extremely narrow lodes. This cannot be said of oil and natural gas. The risks are far greater and the cost of exploiting tin out of granite is far greater than the equivalent cost of exploiting oil.
7.30 p.m.
There is also the important factor that the major oil companies—the "Seven Sisters", or whatever one might like to call them—are in a position very much to influence world prices, by virtue of what I consider to be cartel agreements. But it cannot be said that the tin producers can influence the prices of tin on the London Metal Exchange. The only way in which prices for tin are influenced on the London Metal Exchange is by releases from the American strategic stockpile, which I said earlier is likely to run out in the 1970s at the present rate of release. Then the price of tin will


rocket upwards and this country's supplies will be in great danger. Through agreements among themselves, the oil companies can influence the prices for their products and thereby ensure that they will get a certain minimum return. The tin companies cannot do that. Their margins are of necessity very much narrower because the industry is far weaker.
I hope that the Chief Secretary does not resort to the argument of precedent, and say that the Government cannot grant the concession because it will set a precedent, and other people will make similar demands. That argument is certainly not true of land or industrial building, and it is true to only a very limited extent with oil and natural gas.
If he does not advance that argument, I fear that he will mention the 45 per cent. cash grant. Originally of 40 per cent., it was introduced for the development areas many months ago, and there is still great uncertainty about it in the mining industry. Even after this vast time, the tin-mining industry still does not know whether the 45 per cent. cash grant is available to it for the exploitation of new shafts. I have corresponded with the Board of Trade for months to try to find out whether the mining industry is eligible for the 45 per cent. cash grant for exploitation and development. Although the legislation was brought before the House months ago the question is still being debated by the Board of Trade.
This is a serious matter for the tin-mining industry, which still does not know where it is. Even if the Board of Trade agrees that the 45 per cent. cash grant is available for exploration and the sinking of new shafts, the financial position is still considerably worse than under the old system of free depreciation and capital allowances.
I can give the Chief Secretary the figures, though I shall not do so now because I do not want to delay the Committee. They show quite clearly that the advantages for the tin-mining industry are considerably less under the present system of 45 per cent. cash grants and Corporation Tax than under the old system of free depreciation, Income Tax and Profits Tax. The principle reason is that capital allowances are based on the 55 per cent. residue after the 45 per cent.

cash grant. It is this element which, on a discounted cash flow basis, makes the return to the mining industry less. Therefore, we ask for the 45 per cent. cash grant to apply to exploration and development and also for a three-year tax holiday, for the reasons I have previously explained.
Finally, may I enter a plea for good sense on the regional aspects of the case? It so happens that tin is concentrated almost wholly in Cornwall. Cornwall is a development area and is the county with the lowest incomes in the country, according to last year's Inland Revenue Report. It has lower incomes than the average for Scotland and for Wales, and it has some of the highest unemployment in the country.
We ask that the Government should recognise that tin-mining is an indigenous industry of the poorest county in the country which could be brought back into use, given the same tax advantages as are available in Canada, the United States, South Africa and practically every other country. This would cost the Treasury not a penny, as the present Prime Minister was well aware when he moved a similar new Clause in 1961.
According to the Mining Association of Canada—and I think that its figures are right—for every person employed in mining six people come into employment in the ancillary industries. Therefore, this concession, which would cost the Treasury nothing, would bring more employment to Cornwall through Cornwall's natural industry.
Yesterday, we discussed the £100 million regional employment premium. We want light industry in the West Country, but why cannot we have a concession, which would cost the Treasury nothing, to exploit our indigenous industry which has existed there for 900 years and which could be brought back into play again with the help of Union Corporation, Consolidated Gold Fields and all the other companies. They are great international companies which are searching there now, but which will not open up mines because the tax concessions are less good in this country than in the others to which they can turn.
I repeat the words used by my hon. Friend. We are talking of a wasting asset of a very special nature that is consumed, but the Government and the


Treasury insist upon treating this industry as if it were a commercial or industrial undertaking. There is no kind of comparison between an industrial undertaking and a mineral resource of this nature which is consumed, as my hon. Friend said. It is in part a repayment of capital. We want the Government to look at the Canadian and American income tax laws, and those of practically every other country, and treat this country on a similar basis.

Mr. Jasper More: I want briefly to support the two admirable speeches by my hon. Friends on these new Clauses. I saw with astonishment in HANSARD that four years ago I made a speech on some of the technical taxation aspects of this matter which would now be far beyond the resources of my ageing brain. But there are some matters of broad principle about which the Committee should be told, because things have altered even in the four years which have passed since then.
What we are saying to the Chief Secretary this evening is that it is time we brought this sphere of taxation into the second half of the 20th century. This has been one of the longest delaying actions ever fought by the Treasury, aided. I am sorry to say, by a Royal Commission which said in 1920 that if anything were done on the lines of the new Clause the Treasury would lose a lot of money. We have moved on from that kind of consideration since then.
I want to stress two things. As my hon. Friend the Member for Finchley (Mrs. Thatcher) said so convincingly, we are now in the sphere of capital taxation, and granted that we are dealing with what partly has income character and partly has capital character, the capital character is taken care of by development charges and Capital Gains Tax, which puts the matter into a wholly different context from when it was discussed in 1963. One could call in aid some of the words of Professor Kaldor in the memorandum of Dissent in the Report of the Royal Commission on the Taxation of Profits and Incomes in 1955. That is the first great consideration which should he borne in mind.
Secondly, my hon. Friend the Member for St. Ives (Mr. Nott) has referred very pertinently to the great international

corporations into whose hands mining enterprises all over the world are becoming increasingly confined. One result is that mining is acquiring the character of a short-term operation. When our Income Tax laws were drafted, mining was viewed as something which, practically speaking, went on for ever. When a gentleman called Jevons produced a book in the 19th century suggesting that there might be a time when coal would run out, Mr. Gladstone, in particular, had many sleepless nights, and thought that the whole taxation system and the basis of our economy would have to be changed. Now mining is no longer viewed as something that goes on comfortably for ever.
Mining is a proposition in which, where possible, the prospects are sized up, in particular by these corporations, and it is viewed as a short-term operation, the object being to assess the mineral content of a particular area, work it as quickly as possible and then move on. Obviously, it has financial results completely different from the old-fashioned way of just working on a royalty basis. For that reason, the second part of new Clause 21, in particular, should be carefully considered by the Chief Secretary. I hope that he will bear these two factors in mind for, apart from the taxation technicalities, they have completely altered the whole character and atmosphere of the subject.

Mr. Peter Bessell: It is fair to say that this discussion is a hardy annual and that Amendments and Clauses on these lines have been moved year after year during the passage of Finance Bills. The hon. Lady the Member for Finchley (Mrs. Thatcher), supported admirably by the hon. Member for St. Ives (Mr. Nott), referred to the fact that the last time there was a full discussion of this subject was in 1963. There has, of course, been a discussion on the matter in every year since the war on almost every Finance Bill, and in the 1940s, the 1950s, and the 1960s right hon. and hon. Members on both sides of the Committee have sought to introduce new Clauses to put right this ridiculous situation, which is hampering the development of tin mining in this country.
I am addressing myself chiefly to new Clause 30. Earlier today, the hon. Lady


the Member for Tynemouth (Dame Irene Ward) suggested that it takes ten years to obtain a piece of legislation in the House of Commons. It is quite clear from the long history of this subject that it can take 30 or 40 years, because it has been under discussion for at least as long as that.
Looking back at the list of those who over the years have moved new Clauses and Amendments to various Finance Bills, one finds that they included my own predecessor as Member for Bodmin, Sir Douglas Marshall, the hon. Member for Truro (Mr. Geoffrey Wilson), the predecessor of the hon. Member for St. Ives, Mr. Greville Howard, and the late Mr. Harold Hayman, who was Member for Falmouth and Camborne. But I am going to address myself to the remarks made in 1961 by the present Prime Minister because, during the passage of the Finance Act, 1961, he made an impassioned plea for the adoption of a new Clause which would fulfil the objectives contained both in new Clause 21 and in new Clause 30 tonight.
The Prime Minister, when opening the debate in that year, said that the purpose of the new Clause he was moving was to provide special tax treatment for a single industry. He said that he thought it incumbent on him, therefore, to show that there was a special case for doing this. He concluded that the case was to be found in the fact that it was a matter of national importance that Britain should produce the maximum possible amount of tin and make the fullest use of the indigenous resources of the country. He made the point that the production of tin in Britain and the possibility of exporting it, apart from the fact that we should be able to use it in our own industries, would considerably assist our balance of payments problem in 1961.
If the right hon. Gentleman were here tonight, I am sure that he would agree with me that our balance of payments problem in 1961 is at least as grave, and if he considered that, for the benefit of our balance of payments, this tax holiday should be granted to the mining industry in 1961, it is abundantly clear that there is a much stronger case now.
The Prime Minister went on to explain the peculiar difficulties associated with

mining and he continued his argument by a quotation from The Times in support of the case he was making. In fact, I cannot do better than suggest to the Chief Secretary that he reads again the columns in HANSARD—column 1513 onwards in Vol. 642—containing the eloquent speech made by the Prime Minister.
7.45 p.m.
Among other things, the Prime Minister paid tribute to the skill of Cornish miners over the years and assured the Committee of that day that the skill still existed and should be utilised. I entirely agree with those views. His arguments were sound and there is nothing about them that one could possibly refute now. In column 1522 of Vol. 642, in the course of a long and impassioned speech, the Prime Minister drew attention to the fact that the right hon. Member for Easington (Mr. Shin-well) had, shortly after the war, set up a very important Committee, which produced a report. This was the Westwood Committee and in its report the argument was put forward for precisely this kind of measure and he commended it to the then Government. He based a good deal of his argument upon the case which had already been made by the Westwood Committee. At the end of his speech he said:
Therefore, I hope that the Government will answer that they do take the tin shortage seriously, that they are concerned with developing home production of other metals and minerals where the production can be made more economic, and that they do not propose, because of perhaps outdated ideas of where our materials might come from, to allow this essential development, essential for this country and, I believe, for the world, to he held back any longer by systems of taxation which may have been appropriate in their day but are certainly not appropriate to the world mineral shortage we are now facing."—[OFFICIAL REPORT, 21st June, 1961; Vol. 642, c. 1526.]
The Prime Minister made a strong, cogent and well argued case and it is one which must commend itself to the Chief Secretary. But there is much more to it than that.

Mr. More: Is the hon. Gentleman aware that the reform of this branch of the tax law had an even more august supporter than the present Prime Minister, namely, in 1963, the right hon. Gentleman the


Member for Southampton, Itchen (Dr. Horace King), whom we know as Mr. Speaker?

Mr. Bessell: I am grateful to the hon. Gentleman for that intervention. That is so. There are other interesting names in the Division Lists to which I shall draw attention. But what happened in Committee in 1961 was nothing compared with what happened on the Report stage. On the assurance of the right hon. and learned Member for Wirral (Mr. Selwyn Lloyd), then Chancellor of the Exchequer, that he would look into this matter seriously before Report Stage, the Prime Minister agreed to withdraw his Clause. But on Report stage the right hon. and learned Member for Wirral found, for reasons that I shall not delay the Committee with, that he could not accept such a provision after all.
The Prime Minister was outraged and when he moved an Amendment on Report stage he expressed his grave disappointment. He went on to say that not one hon. Member had produced an argument against the Amendment, and added:
…we have a duty, not only to ourselves, but to the world …".—[OFFICIAL REPORT, 3rd July, 1961; Vol. 643, c. 1085.]
This is stirring stuff. This is the kind of thing which one expects to hear from a potential Prime Minister—a man who takes seriously the potential wealth of the country and is determined to do everything within his power to see it is developed.
Then he went on to refer to the Treasury Ministers of that day, and I ask the Chief Secretary to take careful note of these words. He referred to them as being
… like putty in the hands of their officials … ".—[OFFICIAL REPORT, 3rd July. 1961; Vol. 643, c. 1088.]
Having read those exciting words I naturally turned to the Division List, and I am glad to be able to tell the Committee that among those who voted for the new Clause, which was so admirably put forward by the present Prime Minister, was the Chief Secretary himself. He went into the Division Lobby. So, too, did a number of Members of the Conservative Party, who were then the Government, and the more credit for them for doing so. They did not on that occasion obey their Whips. They were impressed by the eloquence of the debate which had preceded the vote—the speeches not only of the present Prime Minister, but of my

predecessor, Sir Douglas Marshall, who, incidentally, produced new Clauses and Amendments dealing with this subject to almost every single Finance Bill during the whole of the 19 years he was in the House.
This is a very serious matter. It is serious on two counts. First, because of the arguments which have been advanced by the hon. Member for St. Ives. He has drawn attention, as I sought to do yesterday and as I did last Friday, to the peculiar problems of Cornwall—the fact that it has high unemployment, an ageing population, and an absence of work, but that it has enormous potential wealth which could not only be used to provide employment and prosperity, but could contribute to the economic stability of the country by helping in our balance of payments problems.
The hon. Member for St. Ives mentioned that there are a number of international companies which are prospecting at the moment. He is absolutely right in his assessment of the future when he says that no company will involve itself in the kind of capital expenditure which is necessary to sink shafts unless they have comparable tax concessions to those which exist in Canada. The hon. Member for St. Ives mentioned that Canada has a three-year tax holiday and that Ireland has a 20-year tax holiday. I am glad that he did not suggest a 20-year tax holiday, because we should not get that from the Treasury. The proposal is entirely reasonable. That is one of the reasons why these two new Clauses are amongst the most important which will be considered by the Committee throughout the whole of the discussion on this Bill.
But I have a second reason which I cannot stress strongly enough. There are three possible courses of action open to the Chief Secretary. First, he can endorse the words of the Prime Minister in 1961 and accept these Clauses; secondly, he can reject them, as he rejected similar proposals last year; thirdly, he can give an undertaking that he will move on Report a Clause which will be suitable to meet the requirements of this but which might be phrased in slightly different terms to satisfy the requirements of the Treasury. If he does not undertake to introduce his own Clause, or if he does not accept the


proposals which are before him, then I believe that the people of this country will be entitled to say that politicians who advocate one thing in Opposition but who do something totally different when they are in Government are to be regarded with some suspicion.

Mr. Diamond: This is a very safe line for the hon. Gentleman to pursue.

Mr. Bessell: I am glad that I have aroused the indignation of the Chief Secretary. His conscience is heavily burdened. He is a man who voted for these proposals and in a few moments, unless my guess is wrong, he will get up and reject them. If he rejects them is he saying that his right hon. Friend, the Prime Minister, and he himself were simpletons in 1961? If he does not say that, then he has to say that he is not prepared to accept these Clauses for totally different reasons. I cannot guess what those reasons will be, but if they are the same reasons as he rehearsed to the Committee last year and the year before, then he will be on a very sticky wicket indeed.
There is an issue at stake here. For far too long politicians have been told by the electorate that they are dishonest because when they are in opposition they say one thing and when in Government they do a different thing.
The record of Her Majesty's Government in opposition is clear. The words of the Prime Minister are there to be read by everyone. If these words are to be denied, then a new question will appear in the minds of many of the supporters of Her Majesty's Government. I believe, therefore, that when the Chief Secretary rises to his feet, if he is to reject these proposals, if he is not to give an undertaking to produce proposals of his own on Report, he will carry a very heavy burden.

Mr. Marcus Kimball: Such is the eloquence of my hon. Friend the Member for St. Ives (Mr. Nott) and my hon. Friend the Member for Ludlow (Mr. More) that I am frightened that the Chief Secretary will think this is a matter which affects only tin mining in Cornwall. However, I ask the right hon. Gentleman to bear in mind the far greater burden which is suffered by people mining iron-

stone in my constituency and throughout Lincolnshire.
Miners of ironstone already bear an additional levy of l⅛ per ton for the restoration of their surface soil under the new leases. Much of the ironstone in my constituency still mined under old leases and the levy in north Lincolnshire in many cases is as much as 2½d. to 4d. a ton. Therefore, before considering taxation on workings, I hope the Chief Secretary will bear in mind that the people working ironstone are already paying 50 per cent. of much of what they get towards restoration. This is a very important point and it is a very serious burden.
My hon. Friend the Member for Finchley (Mrs. Thatcher) made the point that since 1965 we have reached the position when the whole of capital taxation has been changed by the Finance Act of that year. Therefore. I hope that the Chief Secretary in reply will not just think of tin in Cornwall, but will bear in mind the particular hardship of ironstone in North Lincolnshire because, owing to other Government policies, the demand for this or is in one of its troughs and ironstone owners and the people mining it are enduring hard times.

8.0 p.m.

Mr. Diamond: I am very glad that the hon. Member for Gainsborough (Mr. Kimball) has widened the debate, but although he is much better informed on this topic than I am, I thought that we were talking about non-ferrous metals and I thought that ironstone was not such a one. In all events, he has made his case and I am sure that that is a situation which we ought to bear in mind.

Mrs. Thatcher: On a point of order. New Clause 21 is not confined to nonferrous metals.

Mr. Diamond: I thought that the hon. Gentleman was making his point on new Clause 30, which is.

The Deputy Chairman: We are discussing new Clauses 21 and 30 together.

Mr. Diamond: I was not seeking for a second to suggest that there was any question of anyone going out of order. I thought that the hon. Member was relating his remarks to new Clause 30 and I was saying that ironstone was not a


non-ferrous metal with which that Clause is concerned. If he had said that it was a non-ferrous metal, I would have accepted what he said, because I do not claim his expertise in these matters.
Three major requests are made. One is for tax holidays, the second is for depletion allowances, for part of the royalties to be treated as depletion allowances, and the third is for spreading the income so that the rate of Surtax would be reduced. As we all know, these topics have been discussed many times. They were thoroughly discussed in 1963 and have been mentioned every year since. Therefore, unless we are to go over all the arguments again, which would take an unnecessary amount of time, I think that we should concentrate on what has happened since that date to justify a new and different approach.
The hon. Member for Bodmin (Mr. Bessell) did my party a great service by drawing attention to the extremely felicitous, forceful and cogent way in which the Prime Minister, then the Shadow Chancellor of the Exchequer, performed his duties, a model for anybody seeking to discharge that function. He was performing the duty of an Opposition fully, and I support everything which he said in the circumstances in which he said it. I do not share the view of the hon. Lady, who astonished me by suggesting that the Chairman of the Conservative Party did not know Conservative philosophy. I shall return to that later.
The Prime Minister was doing what every hon. Member of an Opposition has to do—to seek an opening and to make whatever case he could to help a particular situation which he wanted to help within the powers of an Opposition, which are not the same as the powers of the Government. In the circumstances of that time, it seemed to him to be a suitable opening on which to base the case, and he made a great impression on all who heard him. But many things have happened since then. The Prime Minister was then concerned with measures which would enable new strength to go to the tin mining industry in Cornwall.
Since then, we have had the allowances which the hon. Member for St. Ives (Mr. Nott) mentioned, which for tin mining,

which, so far as I know, is almost exclusively concentrated in the development area of Cornwall, have meant a 45 per cent. cash grant.

Mr. Nott: No. it does not.

Mr. Diamond: It has the cash grant of 45 per cent., which is an enormous inducement, for all the physical assets involved in mining. There is an area, about which there are now discussions between the industry and the Board of Trade, concerned with the labour element in certain new works associated with mining. This is a matter for discussion to draw a precise line, but in terms of hard physical assets there is no question but that the mining industry gets this 45 per cent. grant. It used to get the free depreciation allowance. Those were advances since the matter was last discussed, and the situation has therefore considerably improved.

Mr. Nott: The free depreciation and the 30 per cent. investment allowance were available for exploration, for new shafts. The 45 per cent. cash grant is not yet available for new shafts, and this is the point. It is not related to the Clause, but we would be gratified if the Chief Secretary could clear up this matter.

Mr. Diamond: This is not a suitable arena in which to clear up an area of doubt about whether an allowance of a kind should be given to a particular kind of work. I am giving the hon. Gentleman the general answer. He has used an expression which would incorporate both physical assets and labour, and there may be a division to be drawn. However, we cannot sort that out here. I am aware of the point he is making and I am saying that the present intention is to give, as the Industrial Development Act provides, 45 per cent. investment grant for the new physical assets invested in mining. This is a tremendous advance and it takes the place of other allowances which, again, were an advance on the situation which existed in 1963.
So successful is the general improvement in the approach since 1963 that we now have a situation in which I am told that there are two major tin producers in Cornwall—Geevor and South Crofty—both very prosperous according to their published accounts—I am not referring to any confidential information—and some 20 companies engaged in exploration, or


in trial drilling for tin in Cornwall. The situation has been completely changed and we have reason to believe that there is no case for special treatment—special to this industry—because new benefits are being introduced into the development area, and we agreed to one of them only yesterday—the regional employment premium, which, of course, will benefit the development area and help in the general economic activity in the area.
All of these things are helping, and I repeat that we have no reason to believe that any further special help is needed to get this one industry on its feet so that it can make the contribution which is can make and which we want it to make.

Mr. Bessell: The right hon. Gentleman's assumptions are incorrect. He has quoted two companies which are now undertaking tin mining in Cornwall. But they have been doing so for 60 years and their existence is not the result of any change since 1963. He mentioned the grants which the hon. Member for St. Ives (Mr. Nott) has questioned. Certainly, they are not yet available, but, even if they become available, one of the richest deposit areas in Cornwall, the Gunnislake area, is outside the development area and would not qualify anyway, so both the right hon. Gentleman's arguments are demolished.

Mr. Diamond: The hon. Gentleman must not try to ride off in that way. First, if a particular area which is being prospected is outside a development area, although the grant would certainly not be as high as 45 per cent., which is the rate applicable to a development area and although this area will not get the immediate benefit although it is contiguous, in due course it will get some benefit from R.E.P., and the fact remains that it still gets an allowance.

Mr. Bessell: Mr. Bessell indicated dissent.

Mr. Diamond: I do not know whether the hon. Gentleman would care to listen to my remarks with one-tenth of the attention which I gave to his, but if he would he would be much quieter.

Mr. Bessell: Of course I was listening to the right hon. Gentleman's remarks. What astonishes me in their utter inaccuracy. He has said that the premium would

be available for non-development areas. We argued this yesterday; that is not the case.

Mr. Diamond: If the hon. Gentleman would listen, he would realise that that is not what I said. The hon. Gentleman is getting so excited that he is forgetting to listen. I did not say anything like that. I will repeat what I said.
I said that if the area to which he is referring, outside the development area, is contiguous—I do not know the geography—then it is likely that the effect which the R.E.P. is bringing to the development area will spill over into the contiguous area. That is all that I said in that respect. I further said that the grant under the Industrial Development Act was available to all investment of this kind, but at a lesser rate outside the development area than inside. I am not saying anything other than what is a well-known fact.

Mr. Nott: I apologise for interrupting the Chief Secretary again. The R.E.P. will be available on top of the old premium available for manufacturing industries, and the R.E.P. is not available for service industries, nor, as I understand, was it available for industries in the middle layer, which did not receive the premium. If the Chief Secretary is saying that the tin-mining industry is a manufacturing industry, entitled to the 7s. 6d. premium and the 30s. R.E.P., then this is new information for the tin-mining industry, of which it will be most grateful to hear.

Mr. Diamond: With the greatest respect, I did not say that. I did not suggest it, and everyone knows that it is not the case. I am sure that hon. Members are interested in the development of tin mining in their constituencies, and I am sure that this is an important issue. We are ad idem on the objects. I do not know why there should be so much heat. If hon. Gentlemen would listen, they would realise that I have never said anything of the sort.
This industry does not get the S.E.T. premium and, therefore, it does not get the R.E.P. payments. But it is a development area, and the point that I was making was that we yesterday passed a Clause which will have the effect of


benefiting development areas, and everyone in a development area will share in the general benefit through economic activity.
The common objective is to obtain a reasonable increase in tin mining, in particular in Cornwall where it is almost exclusively carried out. This is being achieved by methods which the Government have adopted. We believe that there is no reason to seek out special inducements, which are not available to industry or mining elsewhere in order to achieve this objective. It is being done, and it is for that reason that the speeches that have been made in past years, drawing attention to tin mining, were wisely made and have achieved their purpose. It follows from that that the Government are not proposing to recommend acceptance of this new Clause, because we do not see the need to create a special benefit.
The hon. Lady the Member for Finchley (Mrs. Thatcher) dealt with two other reliefs which she is asking to be granted, spreading and the depletion allowance. I do not accept what she has said about spreading, that there is an exact parallel here with the cases which she gave. Spreading and top slicing, which is the method that she was proposing, arise where there is not a concentration of income in a particular year but where, broadly, a large sum is received in anticipation of income coming in over a subsequent number of years and it therefore is of a different character.
It would be wholly unreasonable to regard that as income of that year. This is no different from many professions. The Bar, as far as I am aware, is such an example, where one can have tremendous variations between one year and another. One might get a very good case in one year, producing high fees, quite different from the normal run of income. There is no reason, in circumstances like that, to seek to alleviate the tax burden by spreading it in some way or another, and I am afraid that I cannot recommend to the Committee that the proposal should be adopted.
I recognise that there is something in the case that she made for the depletion allowance, that there is an element of the royalty which is received for the consumption of the asset rather than for the

use of the asset. The asset is wholly consumed. That is perhaps a little confused, because the asset in that case is not the land that we are talking about, it is something which has been found underneath the land, and something for which normally no special expenditure has been incurred. The reason that I referred to special expenditure is because the whole function and purpose of the capital grants is to encourage investment.
8.15 p.m.
It is for that reason that attention has to be drawn to whether special expenditure is incurred, and there is no special expenditure incurred in those cases. The land is used, the use of the land is restored, and there is no difference between this and many other things which she said she does not accept as an exact parallel, but about which her colleagues—I do not know whether she was a member of the Government at the time, discussing this matter—took the same view as myself.
It is true, as she says, that we have since had additional taxes, but it is not true to say that Capital Gains Tax is involved here so far as royalties are concerned. It may be that if there were an arrangement of the kind she suggests, we would have to alter Capital Gains Tax so as to bring in liability the element which she seeks to exclude from Income Tax liability. There is no such provision at the moment, and I am bound to say that as it is not the subject of Capital Gains Tax, it is excluded because it is liable to Income Tax.
There is not sufficient weight to the arguments which she has put forward, although I accept that there is a point, to suggest that there should be this rather artificial means of segregating a portion of this, which might be differently regarded, and to treat it as liable to Capital Gains Tax instead of liable to Income Tax. I come, therefore, to the same conclusion as her colleagues came to in an earlier year, that this is not a new Clause, and these are not the proposals, which we could recommend to the Committee.

Mr. Bessell: I do not want to delay the Committee, but we could not possibly accept the speech which we have heard from the Chief Secretary tonight without protest. I have a great personal regard


for the Chief Secretary, as I am sure everyone on all sides of the Committee has. He carries the weight and burden of the Finance Bill year by year, and he is always most careful in all his statements to the Committee to be accurate and to make certain that the briefs with which he has been provided, or with which he has provided himself, will be received with respect, and not be subject to questioning.
Yet the arguments which he put to the Committee tonight were, and I say this with respect, not only ludicrous in respect of tax but they were in many parts woolly and inaccurate. It is regrettable that he should have slipped from his high standard. I appreciate that he is in a very embarrassing situation. He is in the position of having to say to the Committee that that which he and his hon. and right hon. Friends advocated, voted for in 1961, campaigned for in Cornwall between 1959 and 1964, the things which they promised to do, they are not now prepared to do. He has to find an excuse and a reason for breaking his word, and it is no less than that.
One has only to read the speech of the Prime Minister when he was the Shadow Chancellor to realise that this is a breach of faith. Having said that, it is understandable that the Chief Secretary should find himself in great difficulty in answering the debate tonight.

Mr. Diamond: I am not embarrassed. There is no question of breach of faith. It is far from being a question of not having carried out what we think should have been carried out. We have gone further, and tin mining is showing signs of prosperity, which is quite different from the previous situation.

Mr. Bessell: The right hon. Gentleman talks about mining showing signs of prosperity. That is not true. If he would do what his right hon. Friends the Minister of Housing and Local Government and the Board of Trade have done, namely, visit Cornwall, he would know that that is not an accurate statement.
There are only two tin mines in Cornwall. Both have been operating for at least 60 years. No new mining venture has commenced since 1963. It is true that a certain amount of exploration is in progress. There has been mining ex-

ploration in Cornwall for as long as I can remember; and I have known Cornwall since I was 5 years old, which was 40 years ago. There is no material change in the situation. I am sure that the hon. Member for St. Ives (Mr. Nott) will support that statement.
The Chief Secretary mentioned investment grants. He may be right. But if he is saying that the investment grant of 45 per cent. is available to anyone developing tin mining in the development areas of Cornwall, this is news which the hon. Member for St. Ives has been trying to extract from the Board of Trade for at least six months. I know that that is so: I have been trying to extract it myself. If that is the case, it is welcome news. But it still does not meet the case.
There are sections of the former mining areas in Cornwall where prospecting has been taking place for some time and where it is thought that there are specially rich deposits but which come outside the development area. But they will not get the benefits of the Industrial Development Act, 1966; they are ruled out. This has been a matter of correspondence between the President of the Board of Trade and myself and other hon. Members for the last few months.
The Chief Secretary has put forward an argument which, as I am sure he will find when he considers it carefully, is incorrect in detail. Therefore, if he finds when he reads HANSARD tomorrow that the argument which he put forward is based on fallacy, I ask him to give an undertaking that he will reconsider the case with a view to introducing on Report an Amendment which will meet the requirements of the two Amendments which we are discussing and the Amendment which was proposed so admirably by his right hon. Friend in 1961.

Mr. Nott: I support what has been said by the hon. Member for Bodmin (Mr. Bessell).
I have not been a Member for long. I have heard the Chief Secretary answer admirably a vast range of Amendments and new Clauses on two Finance Bills. But I have never heard an answer to a new Clause which contained so many basic inaccuracies as the answer which he gave tonight. It just is not true that the tin mining industry of Cornwall has benefited since 1963. The cash grants which he mentioned must be worth less


than 50 per cent. of what they were worth before 1963 under the Conservative Administration. There cannot be any argument about that. Even if the 45 per cent. cash grant is made available for exploration and development of the mines, the amount is still less than it was under the previous arrangements of free depreciation and investment allowances.
It is not good enough for the Chief Secretary, on a new Clause which is concerned with non-ferrous metal mining, to mention the regional employment premium. That is not available for metal mining. It is just as useful to talk about some completely different tax altogether. The regional employment premium is completely irrelevant to what we are discussing.
I am shocked by the Chief Secretary's description of the function of an Opposition. I am shocked that he should say that it was the function of the Opposition in 1961 to propose Amendments and new

Clauses the wording of which was precisely the same as the wording of the proposals which we are considering today and reject such proposals when they come to power. It is the function of the Opposition to probe the Government. But we are dealing with a quite different matter. I think that the Chief Secretary's words will tend to bring public life into disrepute.

Mrs. Thatcher: I have the only crumb of comfort, for the Chief Secretary said that there was something in what I said about a capital element in royalties. I hope that he will consider that carefully, and particularly the heavy impost of a development levy. Perhaps one day he will be converted. Perhaps it would be better if we got to the barricades now.

Question put, That the Clause be read a Second time:—

The Committee divided: Ayes 113, Noes 149.

Division No. 369.]
AYES
[8.25 p.m.


Alison, Michael (Barkston Ash)
Grieve, Percy
Murton, Oscar


Allason, James (Hemel Hempstead)
Grimond, Rt. Hn. J.
Noble, Rt. Hn. Michael


Atkins, Humphrey (M't'n &amp; M'd'n)
Gurden, Harold
Nott, John


Awdry, Daniel
Hall, John (Wycombe)
Orr-Ewing, Sir Ian


Bell Ronald
Hamilton, Marquess of (Fermanagh)
Osborne, Sir Cyril (Louth)


Bennett, Sir Frederic (Torquay)
Hamilton, Michael (Salisbury)
Page, Graham (Crosby)


Bessell, Peter
Harrison, Brian (Maidon)
Page, John (Harrow, W.)


Birch, Rt. Hn. Nigel
Harvie Anderson, Miss
Pike, Miss Mervyn


Boyd-Carpenter, Rt. Hn. John
Hawkins, Paul
Prior, J. M. L.


Braine, Bernard
Heald, Rt. Hn. Sir Lionel
Pym, Francis


Brinton, Sir Tatton
Higgins, Terence L.
Ramsden, Rt. Hn. James


Bromley-Davenport, Lt.-Col. Sir Walter
Hiley, Joseph
Rees-Davies, W. R.


Brown, Sir Edward (Bath)
Hirst, Geoffrey
Ridsdale, Julian


Bruce-Gardyne, J.
Hogg, Rt. Hn. Quintin
Russell, Sir Ronald


Buchanan-Smith, Alick(Angus,N&amp;M)
Holland, Philip
Scott, Nicholas


Buck, Antony (Colchester)
Hooson, Emlyn
Sharples, Richard


Bullus, Sir Eric
Hutchison, Michael Clark
Shaw, Michael (Sc'b'gh &amp; Whitby)


Campbell, Gordon
Iremonger, T. L.
Smith, John


Carlisle, Mark
Jenkin, Patrick (Woodford)
Taylor, Sir Charles (Eastbourne)


Clegg, Walter
Johnston, Russell (Inverness)
Taylor, Frank (Moss Side)


Cooper-Key, Sir Neill
Jopling, Michael
Teeling, Sir William


Costain, A. P.
Kimball, Marcus
Thatcher, Mrs. Margaret


Crosthwaite-Eyre, Sir Oliver
King, Evelyn (Dorset, S.)



Crouch, David
Kitson, Timothy
Turton, Rt. Hn. R. H.


Cunningham, Sir Knox
Knight, Mrs. Jill
Vaughan-Morgan, Rt. Hn. Sir John


Dalkeith, Earl of
Lewis, Kenneth (Rutland)
Wainwright, Richard (Colne Valley)


Dance, James
Lubbock, Eric
Walker, Peter (Worcester)


Davidson,James(Aberdeenshire, W.)
McAdden, Sir Stephen
Ward, Dame Irene


Dean, Paul (Somerset, N.)
MacArthur, Ian
Weatherill, Bernard


Deedes, Rt. Hn. W. F. (Ashford)
Macleod, Rt. Hn. Iain
Webster, David


Doughty, Charles
Macmillan, Maurice (Farnham)
Wells, John (Maidstone)


Drayson, G. B.
Maddan, Martin
Whitelaw, Rt. Hn. William


Eden, Sir John
Mawby, Ray
Wills, Sir Gerald (Bridgwater)


Elliott,R.W.(N'c'tle-upon-Tyne,N.)
Maydon, Lt.-Cmdr. S. L. C.
Wilson, Geoffrey (Truro)


Eyre, Reginald
Mills, Stratton (Belfast, N.)
Winstanley, Dr. M. P.


Farr, John
Mitchell, David (Basingstoke)
Wood, Rt. Hn. Richard


Glover, Sir Douglas
Monro, Hector



Grant, Anthony
Morrison, Charles (Devizes)
TELLERS FOR THE AYES:


Gresham Cooke, R.
Mott-Radclyffe, Sir Charles
Mr. Jasper More and




Mr. Anthony Royle.




NOES


Albu, Austen
Armstrong, Ernest
Barnes, Michael


Anderson, Donald
Ashley, Jack
Barnett, Joel


Archer, Peter
Bacon, Rt. Hn. Alice
Beaney, Alan




Bidwell, Sydney
Hattersley, Roy
Moyle, Roland


Bishop, E. S.
Hazell, Bert
Murray, Albert


Booth, Albert
Herbinson, Rt. Hn. Margaret
Norwood, Christopher


Boston, Terence
Hilton, W. S.
O'Malley, Brian


Brooks, Edwin
Hobden, Dennis (Brighton,K'town)
Oram, Albert E.


Broughton, Dr. A. D. D.
Horner, John
Orbach, Maurice


Butler, Mrs. Joyce (Wood Green)
Houghton, Rt. Hn. Douglas
Orme, Stanley


Cant, R. B.
Howie, W.
Page, Derek (King's Lynn)


Chapman, Donald
Hoy, James
Park, Trevor


Coleman, Donald
Huckfield, L.
Parker, John (Dagenham)


Concannon, J. D.
Hughes, Hector (Aberdeen, N.)
Parkyn, Brian (Bedford)


Corbet, Mrs. Freda
Hughes, Roy (Newport)
Pearson, Arthur (Pontypridd)


Dalyell, Tarn
Hynd, John
Pentland, Norman


Davidson, Arthur (Accrington)
Janner, Sir Barnett
Perry, Ernest G. (Battersea, S.)


Davies, Dr. Ernest (Stretford)
Jenkins, Hugh (Putney)
Price, William (Rugby)


Davies, Harold (Leek)
Jones, T. Alec (Rhondda, West)
Probert, Arthur


Davies, Ifor (Gower)
Kelley, Richard
Rankin, John


Dell, Edmund
Kerr, Dr. David (W'worth, Central)
Richard, Ivor


Dewar, Donald
Kerr, Russell (Feltham)
Robinson, W.O.J. (Walth'stow, E.)


Diamond, Rt. Hn. John
Ledger, Ron
Roebuck, Roy


Dobson, Ray
Lee, Rt. Hn. Frederick (Newton)
Rose, Rt. Hn. William


Dunnett, Jack
Lestor, Miss Joan
Rowland, Christopher (Meriden)


Dunwoody, Mrs. Gwyneth (Exeter)
Lipton, Marcus
Ryan, John


Dunwoody, Dr. John (F'th &amp; C'b'e)
Luard, Evan
Shaw, Arnold (Ilford, S.)


Ellis, John
Lyon, Alexander W. (York)



English, Michael
Lyons, Edward (Bradford, E.)
Sheldon, Robert


Ennals, David
McBride, Neil
Silkin, Rt. Hn. John (Deptford)


Ensor, David
McCann, John
Silverman, Julius (Aston)


Faulds, Andrew
MacColl, James
Silverman, Sydney (Nelson)


Fernyhough, E.
MacDermot, Niall
Swain, Thomas


Fletcher, Ted (Darlington)
Macdonald, A. H.
Swingler, Stephen


Forrester, John
McKay, Mrs. Margaret
Taverne, Dick


Fraser, John (Norwood)
Mackenzie, Gregor (Rutherglen)
Tinn, James


Fraser, Rt. Hn. Tom (Hamilton)
Mackintosh, John P.
Urwin, T. W.


Fresson, Reginald
McMillan, Tom (Glasgow, C.)
Weitzman, David


Gardner, Tony
McNamar, J. Kevin
Wellbeloved, James


Gourlay, Harry
Mahon, Peter (Preston, S.)
Whitaker, Ben


Gray, Dr. Hugh (Yarmouth)
Mallalieu, E. L. (Brigg)
Whitlock, William


Gregory, Arnold
Marquand, David
Willey, Rt. Hn. Frederick


Grey, Charles (Durham)
Maxwell, Robert
Williams, Alan Lee (Hornchurch)


Griffiths, David (Rother Valley)
Mayhew, Christopher
Williams, Mrs. Shirley (Hitchin)


Griffiths, Rt. Hn. James (Llanelly)
Mikardo, Ian
Willis, George (Edinburgh, E.)


Hale, Leslie (Oldham, W.)
Millan, Bruce
Wilson, William (Coventry, S.)


Hamilton, William (Fife, W.)
Miller, Dr. M. S.
Wyatt, Woodrow


Hamling, William
Milne, Edward (Blyth)



Harper, Joseph
Mitchell, R. C. (S'th'pton, Test)
TELLERS FOR THE NOES:


Harrison, Walter (Wakefield)
Molloy, William
Mr. Harold Walker and


Haseldine, Norman
Morris, Alfred (Wythenshawe)
Mr. Ioan L. Evans.



Morris, John (Aberavon)

New Clause NO. 22.—(CHILD ALLOWANCES.)

In section 212 of the Income Tax Act 1952, as amended by section 12 of the Finance Act 1963, for the references to f165, £140 and £115 there shall be substituted references to £175. £150 and £125.—[Mr. Dean.]

Brought up, and read the First time.

Mr. Dean: I beg to move, That the Clause be read a Second time.

The Temporary Chairman: If the Committee agrees, with this Clause we can discuss new Clause No. 23—"Child allowances for widows".

Mr. Dean: Thank you, Sir Beresford.
The Clause deals with a subject on which there has been much discussion in recent months, namely child allowances. It proposes to raise child allowances by a token amount of £10, and new Clause 23 proposes to raise child allowances for widows, again by a token amount, in

this case £20. These allowances were last raised in the 1963 Finance Act, when they were also graduated according to the age of the child. They were then raised from £70 to £115 for children under 11, to £140 for children between 12 and 16, and to £165 for children over 16.
To justify this increase in child allowances I ask the Committee to consider what these allowances are designed to achieve, and I hope the Government will welcome this opportunity to state their views and their intentions in this respect. There is considerable confusion about the Government's intentions. There have been surveys, and indeed a good deal of discussion, during the last 18 months or so which have focussed attention on the general problem of child poverty. The Government have told us on a number of occasions that action is urgent, but no action has yet been taken, and we


have had no indication from the Government of what action they propose.
No doubt hon. Members read in the Press last weekend that the Government intend to introduce a Bill to increase pensions and other cash benefits, but there was no clear indication in these announcements whether the Government intend to act on family allowances, or child allowances. I therefore ask the Financial Secretary to say whether, in this forthcoming legislation, the Government intend to increase family allowances and/ or child allowances. If the answer is "No", I hope that the hon. and learned Gentleman will tell us when the Government intend to act, because it will be very difficult to decide on these new Clauses without this information.
What is the Government's attitude to child allowances in general, and to these new Clauses in particular? There was a very interesting debate in the House on 20th April on the subject of family poverty. At the end of the debate many of us on this side of the Committee were confused about the Govermnent's attitude to this problem. In her opening speech the right hon. Lady the Minister of Social Security suggested various methods of tackling the problem. It was quite clear that her sympathies lay with increasing cash family allowances, and reducing the child tax allowance to pay for them. Yet the Minister without Portfolio, when winding up, dwelt on the disadvantages of this method. Only yesterday, in answer to an Oral Question, the Chancellor drew a clear distinction between cash family allowances and child allowances through the tax system.
It looks as if there is a good old battle raging in the Government about what the policy should be and I have no complaint if they find it difficult to decide on their action on this difficult issue, but, the longer they delay, the less action is being given to what they admit is an urgent problem. This confusion about their policy on child allowances should be cleared up as soon as possible.
We believe that there is a strong case for the allowances and for increasing them and we should be strongly opposed to their reduction or abolition. This is one of the methods of getting equity in taxes and of recognising the necessary expenses of a family man. If they were reduced, it would be a back-door increase

in taxation of the worst kind, as it would fall on the family man and not on the bachelor.
It would penalise the highly qualified young executive of the kind who is already leaving Britain in the brain drain in disturbingly large numbers, and most important of all, it would bring within the tax bracket large numbers of people who are not paying Income Tax at all. A man with three children can now earn nearly £1,000 a year without paying tax, whereas without child allowances he would start paying on an income of £437. Finally, increased Budget problems would be involved were these arrangements made through cash allowances. These are strong arguments for maintaining child allowances.
These proposals are very modest, involving an increase of £10 for most people and £20 for widows. They have not been increased since 1952, since when costs have risen substantially. The proposal to treat widows preferentially is in line with the National Insurance cash benefits and recognises that widows are both breadwinners and the housewives to their families. Their earnings are mostly lower than those of their late husbands, but their expenses are often as great, if not greater. They must still pay the cost of home maintenance, fuel and rates. They are usually in the same house as when their husbands were alive because the children need the space.
This subject has great topical interest. This is a probing Amendment to give the Government a chance to state their policy over the future of child allowances clearly. We have waited many months for such a statement on what they regard as an urgently important matter. There have been confused and conflicting arguments and I hope that the Financial Secretary will give us a clear statement of the Government's intentions.

8.45 p.m.

Mr. MacDermot: The hon. Member for Somerset, North (Mr. Dean) said that the new Clauses are intended as probing, so as to raise wider questions. New Clause 22 proposes an all-around increase of £10 in the child allowance, which he described as a token increase. I do not know whether he realises what sums are at stake in these allowances. Rising prosperity has meant that increasing numbers of people can and do


claim them. An increase of £10. which is apparently modest, would cost £33 million in the current year and £41 million in a full year. In the light of my right hon. Friend's Budget statement and cost of this Budget, hon. Members will realise that he could not accept that this year.
Naturally, there is sympathy for any proposal to increase child allowances, but we must consider them in relation to other allowances as a whole. They are not unfavourable, particularly when compared with the wife element in the married man's allowance, which is £120 more than the single person's allowance and thus is less than that for a child over 11. If we raised child allowances by £10, the allowance for a child under 11 would be above that for a wife.
The hon. Gentleman said that the intention of the second new Clause was an all-around increase of £20 in child allowances to widows, single women and separated or divorced wives. I think that there has been a typing error and that one would be raised by only £10 and not £20, which I think is not the intention—

Mr. Dean: Mr. Dean indicated assent.

Mr. MacDermot: —as the hon. Gentleman confirms. The cost of this would be much less because it would apply to only a relatively narrow class of taxpayers. It would cost about £1 million in a full year.
I have no doubt that this new Clause is prompted by Clause 16 of the Bill, which proposes a higher dependent relative allowance for this category of taxpayers. When considering Clause 16(3) in Committee, I said that it gives a bigger child allowance for the first child of a widow, single woman or separated or divorced wife who has the sole responsibility for a child or children. In those cases, under that subsection, an additional personal allowance of £75 will now be due, whether or not a resident child minder is employed to look after the child—provided that the conditions in regard to employment or incapacity are satisfied in the case of a single woman or divorced or separated wife.
This is a substantial recognition of the extra difficulties that women face when

they are left with the single-handed responsibility of a young child, and I suggest to the Committee that it would be going too far to give them a bigger basic child allowance as well.
On the more general question to which the hon. Member for Somerset, North referred, I am afraid that this is not the occasion for me to satisfy his request for a statement of Government policy on this matter. He indicated that this was partly a probing Clause, to probe the Government's intentions about how they intend to handle this admittedly difficult problem of child poverty in large families.
This matter was debated on 20th April. The whole problem, and the suggestions made for tackling it, were discussed by my right hon. Friend the Minister of Social Security in that debate. One suggestion was what has been called the "give and take" scheme for financing additional family allowances by withdrawing some child allowances. That is one of the proposals being examined and, as my right hon. Friend said, this whole problem is being thoroughly examined by the Government; and an undertaking has been given that an announcement will be made about it this summer. I am not in a position to do so. Nor am I the person, nor this the occasion, on which to make such an announcement. I must, therefore, ask the Committee to be patient and await the promised announcement. In the meantime, I must advise the Committee to reject the new Clause.

Mr. Douglas Houghton: This is a subject in which I have a close interest and about which, as Minister, I did a great deal of work. The hon. Member for Somerset, North (Mr. Dean) has not succeeded in getting much additional information. I am not surprised at that, but it surprises me that here we are in June without any decision from the Government about what is to be done to solve this problem of child poverty.
This is an intricate subject and there are many considerations to be weighed in deciding the policy to adopt. However, we said how urgent the matter was and how devotedly and continuously we were giving attention to it. It is a matter of deep disappointment to me that we are still without a decision on policy. If we are to have a tax scheme which combines


Income Tax and child allowances with family allowances, the timing, for administrative and other purposes, is of great importance. One would have to change the child allowances, which would mean changing the coding for P.A.Y.E. purposes.
I discovered when I went into the matter how difficult it would be to change the amount of child allowances for tax purposes in the middle of a tax year. The conclusion I reached was that it was almost inevitable that, if we were to vary the amount of child allowances, that would have to be done at the beginning of the tax year. To do it then would mean that either the amount would have to be decided before the main work of coding was done in November, before the beginning of the tax year, or it would involve a massive recoding operation following a budgetary change after the introduction of the Bill in April.
It is desirable, in these circumstances, to reach a decision in time for the job to be done in the normal course of pay-as-you-earn coding, which is this autumn, rather than have a big rush recoding job done between April and June of next year. This points to the need to decide before next year's Budget if Income Tax allowances are to be brought into the scheme introduced. This would suggest that there must be a decision in the summer—and if we are talking of summer, I think we are having it now.
It is probably the only bit we shall get, and the Government should hurry up to catch the summer while it is here. But if we are to have a decision in the summer we must also have a Bill in the autumn. This is important. If it is left over to next year, we shall have this very big recoding job being done in extremely difficult circumstances in the early part of next summer.
These are very important considerations. If we are improving personal allowances, a recoding operation can be undertaken after the introduction of the Budget bringing in the improved allowances in June without any serious difficulties, because people then get the benefit of the delay in accumulated tax reductions which lead to a mini-tax holiday in the week in which the improved allowances first come into operation. But what no Chancellor of the Exchequer has been able to do since pay-as-you-earn was

introduced has been to reduce personal allowances with a delayed coding operation and an accumulation of tax debts instead of an accumulation of tax credits.
That is why it is so important that if Income Tax child allowances are to be reduced as part of an interlocking scheme for family allowances the job should be done in readiness for the new coding, so that the changed allowances can come into operation at the beginning of the tax year.
The Committee will remember that when the Chancellor of the Exchequer increased the standard rate he made provision for it in a Bill in the autumn preceding the beginning of the tax year in which it was to operate. Otherwise, he would have been confronted with exactly this problem. The tax tables providing for the increase in the standard rate would have come into operation in the June, with an accumulation of tax debts leading to a stiff increase in pay-as-you-earn on the new rates of tax. We must understand that we not only want an announcement in the summer, but, if it is to be done in this way, must have legislation in time for the coding to be done on the new basis at the proper time so that the new levels of taxation, if such there be, may be introduced at the beginning of the tax year.
It may be questioned whether this is the way to do it at all. There are strong opinions held both ways about a scheme of this kind, as to what it would involve if there were to be some element of self-balancing, for there are many permutations in such schemes. But if, so to speak, there is an element of compensation for improving all the family allowances by reducing the Income Tax child allowances—

The Temporary Chairman: I am sorry to interrupt the right hon. Gentleman, but he has been long enough a Member to know that he is going a bit wide of this new Clause.

9.0 p.m.

Mr. Houghton: I have been so long out of Finance Bill debates that I had not realised how narrow the debate could be on matters of this kind. I appreciate that I am getting on to a rather wider aspect of the Clauses. I was perhaps


misled by the ease with which the hon. Member for Somerset, North (Mr. Dean) got away with probing into the Government's social security policy.
However, I think that I have said enough, not only to reveal my own anxieties but also to show that it is necessary for us to have a decision in good time if changes of this kind are to be made. I therefore conclude that this is not the moment to improve Income Tax child allowances. While consideration is being given to a system of linking Income Tax child allowances with a change in the level of family allowances, this is not the moment to tinker with Income Tax child allowances. If the two things are to be done together in an interlocking way, one does not improve child allowances if part of the combined operation would be to scale them down to give additional benefits elsewhere or in some other way.
On child allowances generally, it is always difficult to make out a case for improving the personal reliefs under the tax system. I tried this many times when in opposition. How is a higher allowance for a wife, dependent relative, housekeeper, or children, justified? No longer is it related to assumed ability to pay. The Radcliffe Commission, in 1955, discounted that idea and said that there were almost outright fiscal judgments. There was no longer a sophisticated method of adjusting the tax burden to any ascertained financial responsibilities that the taxpayer had. It would be difficult to justify them on any precise basis.
The hon. Member for Somerset, North based such proposals as he made on very much the same grounds as I used to employ, that it is so many years since they were last improved. This is always a very good argument—"Nothing has been done with them for three or four years". I remember one Chancellor saying, "Last year I improved the personal allowances. This year it is the turn of the standard rate". This shows how empirical the whole fiscal judgment has become.
If the hon. Member presses the Clause to a Division, I shall not be able to give him my support, because I think that it would only complicate the sort of plan that I know is under consideration and which I want to see emerge from the

Government's study of this problem. I hope that next time we discuss the matter we shall know what the Government's plans are and that we shall be able then to make our judgment on whether they are suitable and whether they will meet what we believe to be the needs of many families.

Mrs. Thatcher: We shall not be pressing the Clause to a Division, but we do not wish to withdraw it, because we wish to register a protest at the fact that we have not got anything out of the Government spokesman about future plans.
The speech of the right hon. Member for Sowerby (Mr. Houghton) is the best we have had from the Government side during the whole of the debates on the Finance Bill. Most of us regret very much that his speech had to be made from the Front Bench below the Gangway instead of from the Treasury Bench. We should feel very much happier about the taxation handling of these matters and about the future of social service provisions if the right hon. Gentleman were still a senior member of the Government.
However, I do not wish to embarrass the right hon. Gentleman too much by telling him how devoted to him we all are. We shall not divide on the Clause, but we shall not withdraw it.

Question put and negatived.

New Clause No. 30.—(NON-FERROUS METAL MINES IN UNITED KINGDOM.)

(1) The profits of a trade commenced after the passing of this Act and consisting of or including the working of a non-ferrous metal mine situated within the United Kingdom being profits arising from the working of the mine and so arising during a period of 36 months beginning with the day on which the mine is first brought into commercial operations shall be exempt from the corporation tax.

(2) For the purpose of this section a mine shall be deemed to be brought into commercial operation as soon as substantial quantities of ore are extracted from the mine for any treatment and for disposal and such substantial quantities shall not be taken to include ore extracted in the course of searching for, discovering or testing mineral deposits, or winning access thereto.—[Mrs. Thatcher.]

Brought up, and read the First time.

Motion made, and Question proposed, That the Clause be read a Second time.—[Mrs. Thatcher.]

Question put:—

The Committee divided: Ayes 109, Noes 144.

Division No. 370.]
AYES
[9.5 p.m.


Alison, Michael (Barkston Ash)
Hall, John (Wycombe)
Noble, Rt. Hn. Michael


Allason, James (Hemel Hempstead)
Hamilton, Marquess of (Fermanagh)
Nott, John


Atkins, Humphrey (M't'n &amp; M'd'n)
Harrison, Brian (Maldon)
Orr-Ewing, Sir Ian


Bell, Ronald
Harvie Anderson, Miss
Osborne, Sir Cyril (Louth)


Bennett, Sir Frederic (Torquay)
Hawkins, Paul
Page, Graham (Crosby)


Bessell, Peter
Heald, Rt. Hn. Sir Lionel
Pike, Miss Mervyn


Birch, Rt. Hn. Nigel
Higgins, Terence L.
Prior, J. M. L.


Boyd-Carpenter, Rt. Hn. John
Hiley, Joseph
Pym, Francis


Braine, Bernard
Hirst, Geoffrey
Ramsden, Rt. Hn. James


Bromley-Davenport, Lt.-Col. Sir Walter
Hogg, Rt. Hn. Quintin
Rees-Davies, W. R.


Brown, Sir Edward (Bath)
Holland, Philip
Ridsdale, Julian


Bruce-Gardyne, J.
Hooson, Emlyn
Russell, Sir Ronald


Buck, Antony (Colchester)
Hutchison, Michael Clark
Scott, Nicholas


Bullus, Sir Eric
Iremonger, T. L.
Sharples, Richard


Campbell, Gordon
Jenkin, Patrick (Woodford)
Shaw, Michael (Sc'b'gh &amp; Whitby)


Carlisle, Mark
Johnson Smith, G. (E. Grinstead)
Smith, John


Clegg, Walter
Johnston, Russell (Inverness)
Taylor, Sir Charles (Eastbourne)


Cooper-Key, Sir Neill
Jopling, Michael
Taylor, Frank (Moss Side)


Costain, A. P.
Kimball. Marcus
Teeling, Sir William


Crosthwaite-Eyre, Sir Oliver
King, Evelyn (Dorset, S.)
Thatcher, Mrs. Margaret


Crouch, David
Kitson, Timothy
Turton, Rt. Hn. R. H.


Cunningham, Sir Knox
Knight, Mrs. Jill
Vaughan-Morgan, Rt. Hn. Sir John


Dalkeith, Earl of
Legge-Bourke, Sir Harry
Wainwright, Richard (Colne Valley)


Dance, James
Lewis, Kenneth (Rutland)
Walker, Peter (Worcester)


Davidson, James (Aberdeenshire, W.)
Lubbock, Eric
Ward, Dame Irene


Dean, Paul (Somerset, N.)
MacArthur, Ian
Weatherill, Bernard


Deedes, Rt. Hn. W. F. (Ashford)
Macleod, Rt. Hn. Iain
Webster, David


Doughty, Charles
Macmillan, Maurice (Farnham)
Wells, John (Maidstone)


Drayson, G. B.
Maddan, Martin
Whitelaw, Rt. Hn. William


Eden, Sir John
Mawby, Ray
Wills, Sir Gerald (Bridgwater)


Elliott, R. W.(N'c'tle-upon-Tyne, N.)
Maydon, Lt.-Cmdr. S. L. C.
Wilson, Geoffrey (Truro)


Farr, John
Mills, Stratton (Belfast, N.)
Winstanley, Dr. M. P.


Glover, Sir Douglas
Mitchell, David (Basingstoke)
Wood, Rt. Hn. Richard


Grant, Anthony
Monro, Hector



Gresham Cooke, R.
More, Jasper
TELLERS FOR THE AYES:


Grieve, Percy
Morrison, Charles (Devizes)
Mr. Anthony Royle and


Grimond, Rt. Hn. J.
Mott-Radclyffe, Sir Charles
Mr. Reginald Eyre.


Gurden, Harold
Murton, Oscar





NOES


Albu, Austen
Evans, Ioan L. (Birm'h'm, Yardley)
Kerr, Russell (Feltham)


Anderson, Donald
Faulds, Andrew
Ledger, Ron


Archer, Peter
Fernyhough, E.
Lee, Rt. Hn. Frederick (Newton)


Armstrong, Ernest
Fletcher, Ted (Darlington)
Lestor, Miss Joan


Ashley, Jack
Forrester, John
Lipton, Marcus


Bacon, Rt. Hn. Alice
Fraser, John (Norwood)
Luard, Evan


Barnes, Michael
Fraser, Rt. Hn. Tom (Hamilton)
Lyon, Alexander W. (York)


Barnett, Joel
Freeson, Reginald
Lyons, Edward (Bradford, E.)


Beaney, Alan
Gardner, Tony
MeCann, John


Bidwell, Sydney
Gray, Dr. Hugh (Yarmouth)
MacColl, James


Bishop, E. S.
Gregory, Arnold
MacDermot, Niall


Booth, Albert
Grey, Charles (Durham)
Macdonald, A. H.


Boston, Terence
Griffiths, David (Rother Valley)
McKay, Mrs. Margaret


Bray, Dr. Jeremy
Griffiths, Rt. Hn. James (Llanelly)
Mackenzie, Gregor (Rutherglen)


Brooks, Edwin
Hale, Leslie (Oldham, W.)
Mackintosh, John P.


Broughton, Dr. A. D. D.
Hamling, William
McMillan, Tom (Glasgow, C)


Cant, R. B.
Harper, Joseph
McNamara, J. Kevin


Chapman, Donald
Harrison, Walter (Wakefield)
Mahon, Peter (Preston, S.)


Coleman, Donald
Haseldine, Norman
Mallalieu, E. L. (Brigg)


Concannon, J. D.
Hattersley, Roy
Marquand, David


Corbet, Mrs. Freda
Hazell, Bert
Mayhew, Christopher


Dalyell, Tam
Herbison, Rt. Hn. Margaret
Mikardo, Ian


Davidson, Arthur (Accrington)
Hilton, W. S.
Millan, Bruce


Davies, Dr. Ernest (Stretford)
Hobden, Dennis (Brighton, K'town)
Miller, Dr. M. S.


Davies, Harold (Leek)
Horner, John
Milne, Edward (Blyth)


Davies, Ifor (Gower)
Houghton, Rt. Hn. Douglas
Mitchell, R. C. (S'th'pton, Test)


Dell, Edmund
Howie, W.
Molloy, William


Dewar, Donald
Hoy, James
Morris, Alfred (Wythenshawe)


Diamond, Rt. Hn. John
Huckfield, L.
Morris, John (Aberavon)


Dobson, Rav
Hughes, Hector (Aberdeen, N.)
Moyle, Roland


Dunnett, Jack
Hughes, Roy (Newport)
Murray, Albert


Dunwoody, Mrs. Gwyneth (Exeter)
Hynd, John
Norwood, Christopher


Dunwoody, Dr. John (F'th &amp; C'b'e)
Janner, Sir Barnett
O'Malley, Brian


Ellis, John
Jenkins, Hugh (Putney)
Oram, Albert E.


English, Michael
Jones, T. Alec (Rhondda, West)
Orbach, Maurice


Ennals, David
Kelley, Richard
Orme, Stanley


Ensor, David
Kerr, Dr. David (W'worth, Central)
Owen, Will (Morpeth)




Page, Derek (King's Lynn)
Roebuck, Roy
Urwin, T. W.


Park, Trevor
Ross, Rt. Hn. William
Walker, Harold (Doncaster)


Parker, John (Dagenham)
Rowland, Christopher (Meriden)
Wellbeloved, James


Parkyn, Brian (Bedford)
Ryan, John
Whitaker, Ben


Pearson, Arthur (Pontypridd)
Shaw, Arnold (Ilford, S.)
Whitlock, William


Pentland, Norman
Sheldon, Robert
Williams, Alan Lee (Hornchurch)


Perry, Ernest G. (Battersea, S.)
Silkin, Rt. Hn. John (Deptford)
Williams, Mrs. Shirley (Hitchin)


Price, William (Rugby)
Silverman, Julius (Aston)
Willis, George (Edinburgh, E.)


Rankin, John
Swain, Thomas
Wilson, William (Coventry, S.)


Reynolds, G. W.
Swingler, Stephen



Richard, Ivor
Taverne, Dick
TELLERS FOR THE NOES;


Robinson, W. O. J. (Walth'stow, E.)
Tinn, James
Mr. Harry Gourlay and




Mr. Neil McBride.

New Clause No. 33.—(AMENDMENT OF SECTION 5 OF THE INCOME TAX MANAGEMENT ACT 1964).

At the end of section 5(3) of the Income Tax Management Act 1964 there shall be added the following proviso:—
'Provided that where a person has made in his return of income a full and true disclosure of all the material facts necessary to is make an assessment and an assessment is made after that disclosure no amendment of the assessment increasing the liability of that person shall be made except to correct an error in calculation or a mistake of fact'.—[Mrs. Thatcher.]

Brought up, and read the First time.

9.15 p.m.

Mrs. Thatcher: I beg to move, That the Clause be read a Second time.
We notice that the Government's majority is rapidly dwindling. At the end of this debate it will no doubt dwindle even further.
The heading of this Clause sounds dull, but this is one of the procedural new Clauses which affect every single person who pays tax. The Chief Secretary will be aware that subsection (3) of Section 5 of the Income Tax Management Act, 1964, deals with the power of an inspector of taxes to make additional assessments. For most of us, the original assessments are enough, but in fact the subsection gives the inspector very extensive power to make further assessments.
It could, of course, be argued that a good deal of what is in the subsection was contained in any event in Section 41 of the old Income Tax Act, 1952, which preceded the 1964 Act. A number of the powers were in the old Section 41, but Section 5 of the Income Tax Management Act, 1964, goes further than the old Section 41 because the old Section 41 was limited by reference to first assessments, whereas, under Section 5, this power is not limited in that way at all. So Section 5 gives the inspector rather wider power than he had before.
Bearing that in mind, perhaps we can examine a little more closely subsection (3) of Section 5 of the 1964 Act. All lawyers and chartered accountants are familiar with some of the phraseology in it, because it gives an inspector—formerly it gave it to the Commissioners of Inland Revenue—power to make a further assessment if he discovers—and "discover" is the crucial word—either that a relief has been given in excess or that in-insufficient tax has been charged. There have been a number of cases about the meaning of the word "discover", from which it has emerged that that, too, has a very wide meaning.
It can, for example, mean that the inspector himself discovers that he has wrongly interpreted the law. It can mean that a new inspector discovers that his predecessor wrongly interpreted the law. So one can have a case where the poor taxpayer, having made a full disclosure of every relevant factor to enable the Inland Revenue to make the correct assessment in accordance with the law at the time, has paid his tax and then gets a new, further assessment—and not only one but perhaps two—because a new inspector has gone back over the case and has made a different interpretation of the law.
On this side of the Committee, we have now concluded that this is wrong and that the subsection is taking the powers a little too far. I know what the answer will be—that the inspector could, of course, discover that a relief has not been given. He could discover a relieving provision for the taxpayer. How often this has happened, I am not sure, but the right hon. Gentleman could argue that if the taxpayer is entitled to a relief, the inspector should also, as some kind of quid pro quo, on the Revenue side be entitled to impose a further penalty.
I do not necessarily accept that argument. I think that when an assessment has been made after full disclosure and the taxpayer is happy in the knowledge


that he has paid all his liabilities and has disclosed all relevant factors, he should then be able to allocate the rest of his income accordingly. So far the cases I have mentioned have not been on my side. They have all been on the side of the Inland Revenue. The inspector cannot just act on a hunch. He must have some information brought to his knowledge which is a question of fact to enable him to raise an additional assessment. Nevertheless, he can still look at everything with a different interpretation of the law.
What we propose in the new Clause is that there shall be added a proviso to Section 5 to say that where a person has in fact made full disclosure he shall not be liable to an additional assessment, except where the arithmetic has been wrong or in certain cases where there has been a mistake of fact. This would cut out those cases where an inspector looked at the case and remembered a statutory provision of the kind put in last year's Finance Act and which only operated for one year, and applied that. In other words, where he has discovered that previously he had forgotten the law, he can make an additional assessment. We want to cut out that circumstance altogether and provide that where there has been a full disclosure and assessment has been made there shall be no power to make a further assessment on this kind of discovery.
There is one other line of cases which I would put to the Chief Secretary. The right hon. Gentleman ought not—I should not refer to him in that way, for I do not yet entirely regard the Chief Secretary as the arch-ogre of the Inland Revenue, although perhaps by the end of the Finance Bill I shall. If the taxpayer raises an appeal or queries the assessment and the appeal is decided in the usual appeal way or, in the absence of an appeal, there is a settlement which both the inspector and the taxpayer regard as binding, then a further assessment should not be made. That I think is right. However, it would seem by analogy that one ought to say that an assessment following full disclosure is tantamount to a settlement by the inspector of that claim, and once that settlement has been made he shall not have power to go back on it. This would be of great advantage to the taxpayer and I do not think it is asking a great deal.
Many of us are disturbed that relations between the Revenue and the public are not as good as they might be and not as good as they have been. This would help to put them on a very good footing again. It may mean that the Revenue has to forgo a little tax, but if any tax has been forgone it has not been the fault of the taxpayer in the kind of case which the new Clause is intended to cover.
I hope that the Chief Secretary, who must have suffered from many a discovery on the part of his clients—I am sure they streamed to him for advice in bygone days—will know the difficulties and problems that it can cause and that he will help to give some relief of the kind suggested in the new Clause.

Mr. Diamond: It may be convenient for me to reply to the hon. Lady at once and I shall do so in the tones in which she spoke. I share her view that almost as important as the law itself is the practice of assessing and collecting revenue. If we did not have a good relationship on the difficult matter of a taxpayer paying his taxes to the State we should be in considerable difficulty. I think that the country can pride itself not only on the attitude that the public takes in the matter by and large, but also on the understanding of the Inland Revenue in the way it carries out its difficult duties. We are on common ground in our desire that no unnecessary irritation should be caused concerning the machinery of tax assessment and collection.
The hon. Lady touched a tender spot when she referred to the question of a practitioner and this wretched problem of discovery. Every practitioner feels somehow or other that the dice are unfairly loaded against his or her client and in favour of the Revenue. Therefore, I think it would be helpful if I were to say a word or two on how this power is interpreted and whether it should exist and then come more closely to the proposal.
It may sound a little unacceptable, but we are bound to start on the basis that Parliament puts on the Revenue responsibility for collecting this tax. To begin with, the taxpayer knows all the facts and the Revenue knows none and never knows as much about the taxpayer's affairs as the taxpayer does. The taxpayer acts as he thinks fit whereas the


officers of the Inland Revenue are in a general way susceptible to the views of the House, the Revenue being a Department of the Treasury and I a Minister very susceptible to the views of the House, in spite of what is sometimes suggested to the contrary.
It is, therefore, not unfair or likely to breed a sense of injustice for the Revenue to have a slight edge, but only a slight edge, over the taxpayer in terms of corresponding powers and rights. The taxpayer has the right to have an assessment varied and the Revenue has a right to have an assessment varied. A fair reading of the law and the practice would be that there is a slight advantage in favour of the Revenue which is appropriate so long as it is slight and exercised with care and moderation.
Discovery is a very wide power. An inspector can almost wake up one morning and say that he has discovered something. It is not quite that and it has to be some substantial rethinking, but if he finds that, in practice, in fact, or in law, he was wrong in the way in which he made the assessment in the first place, he can make an additional assessment to put the matter right, or, as the appropriate Section describes it, he can give any necessary relief which has not been given.
I mentioned those three—practice, fact and law. There is no dispute between us about fact, because the new Clause includes the right to vary if an error has been made by either the taxpayer or the Revenue. There is no reference to a mistake of law.
As for the practice, if the circumstances are such that an assessment was made in accordance with the practice of the time, although it is subsequently discovered—for example, by a case going to the House of Lords—that, although it was thought to be, it was not the right practice and that what was thought to he the law, was not the law—no additional assessment will be raised because it is then known that the practice was wrong at the time and that the inspector should have raised an additional assessment and would have done so had he known what the House of Lords would decide in a particular case affecting similar cases.
Therefore, when the Revenue discovers as the result of subsequent information of that kind, it does not raise an additional assessment. The only difference between what is being suggested and what is the practice concerns the question of discovery based on an error of law.

Mr. Barnett: What happens when there is a mixture of law and fact? For instance, if one inspector decides to settle a case on the basis that it is a trading company and another inspector later decides that it is not a trading company and reopens the assessment, would that be a matter of fact, or of law, or a mixture of both?

9.30 p.m.

Mr. Diamond: The hon. Member has described this as a matter of fact, plain fact, and these two do not mix. They both arise, often in the same case, but they do not mix. My hon. Friend has asked what happens when they mix, but it is fair to say that this does not happen.
I now return to the question of what happens if there is a mistake of law, where there is a slight difference of opinion between the two sides, where there is a mistake in the law. The hon. Lady says that if a taxpayer has made an accurate return in good faith, and an inspector makes a mistake and under-assesses, then that taxpayer should, on paying that tax, be finally cleared of any further liability arising out of that return. What we want to happen is that everyone should pay his tax according to the correct facts and the correct interpretation of the law.
If, because of a human error of a civil servant, this has not happened, I should have thought that we would want it to happen nevertheless. I would not have thought that it was sufficient to say that the inconvenience and irritation, and certainly disappointment, to the individual taxpayer is sufficient to outweigh our desire, and the general desire of the majority of taxpayers, that each one of us should pay his tax according to his correct rates and the correct interpretation of the law. I would have thought it difficult to put forward a proposition that, just because an individual has made a human error, an inspector of taxes has made a mistake, there should be no opportunity for him to put that right.
That is the only difference between us. I do not want to be heavy-handed


about this, because I accept what the hon. Lady has said, that it is worth going a long way to achieve improvements in the relationship between the Revenue and the taxpayer, and the professions acting on both sides. I think that she would share with me the view that what she is arguing for is not so very different from the practice. It is different in one respect, that of a mistake in law. As to that, it is likely that the majority of taxpayers would wish to see, not necessarily for themselves, but for the other person involved, that he is called upon to pay his correct amount of tax, according to the facts and to law.
I hope, therefore, that the hon. Lady will not press this new Clause unduly.

Mrs. Thatcher: I differ from the Chief Secretary in his interpretation of this matter. The dice are heavily loaded in favour of the Inland Revenue. He says that the taxpayer knows the facts, but one has to select the relevant facts. What he did not say was that the Revenue knows the law, or is deemed to know the law. Once the Revenue has all the facts it is deemed to be capable of applying the law to those facts. What he is saying is that when the Revenue is incapable of applying the law to these facts, it should have a second, third, fourth, fifth, sixth and so on, ad infinitum, chance. I disagree, because the dice are already far too heavily loaded in favour of the Revenue. We are asking that the balance be redressed to some extent.
May I take up the Chief Secretary on one other thing? If his argument is correct, that even if the Revenue discover a mistake of law it should be able to go back and open an assessment or raise further assessments, that argument would follow where there had already been a settlement on one aspect which had settled the entire assessment. His argument would read that he would still want powers to reopen that assessment on another matter.
This is so, because if there has been a wrong application of law on one thing, it would follow that one would want an additional assessment. He and I both know that where there is a dispute on one matter with reference to an assessment, and the whole assessment has been settled as a result of that, the matter does not go any further. That is the only case in

which an additional assessment could be raised.
A full disclosure should be tantamount to a settlement, bearing in mind that the Revenue then has all the facts as known to the taxpayer and the Revenue has all the law. In this case, any mistake of law should operate in favour of the particular subject, who has great trust in the Inland Revenue. The ordinary, average person still has—those of us who know a bit more, perhaps, have not got so much trust. Basically, the average person has great trust in the Revenue. This proposal would help them tremendously. They are entitled to assume that the assessment is correct. Perhaps this would not go the whole way, but it would cut out an abuse against the taxpayer.

Mr. Diamond: I am not a lawyer. The hon. Lady knows far more about these things than I do, but in the case of a settlement a different situation arises. New considerations come in, in a sense, compared with the situation in which there is no question of a settlement but a return is sent in and the inspector says, "I think that the taxpayer owes so much and I make it up as follows."
In the case of a settlement, there are considerations moving from both sides. Each side may take a different view about the correct figure, but there is an agreed settlement with one side saying, "In consideration of your saying so-and-so we will leave the position which I thought was right and we will say so-and-so". That is a sufficient additional factor distinct from the situation which I am otherwise describing.
It would not be right to suggest that the general body of taxpayers should be called upon to bear an additional amount of tax because one individual or a series of individuals who are the beneficiaries of the mistake in law have had a lower assessment than is due in law. In these circumstances, I hope that the hon. Lady will not think it necessary to press the new Clause.

Mrs. Thatcher: The Chief Secretary  saying that if there is a deuce of a lot of mistakes by the Inland Revenue and a lot of extra assessments raised, the body of taxpayers would be called upon to bear the consequences if the new Clause were passed. But I am assuming that there are not many errors. In that case, the


body of taxpayers will not be called upon to bear any consequences.
This is something which the Chief Secretary should look into. When the United States internal revenue had a close look at the matter with the aid of modern machinery and computers, it found that about one-third of the people were over-paying tax because they trusted the Revenue to make the correct assessment. I hope that the right hon. Gentle-

man will go further into this matter. Over-payment of tax does not happen very often, but when it does the taxpayer should have the benefit of the doubt, which would not affect the general body of taxpayers very much. I hope that we shall proceed to a Division.

Question put, That the Clause be read a Second time:—

The Committee divided: Ayes 109, Noes 146.

Division No. 371.]
AYES
[9.38 p.m.


Alison, Michael (Barkston Ash)
Hall, John (Wycombe)
Murton, Oscar


Allason, James (Hemel Hempstead)
Hamilton, Marquess of (Fermanagh)
Noble, Rt. Hn. Michael


Atkins, Humphrey (M't'n &amp; M'd'n)
Harrison, Brian (Maldon)
Orr-Ewing, Sir Ian


Bell, Ronald
Harvie, Anderson, Miss
Osborne, Sir Cyril (Louth)


Bennett, Sir Frederic (Torquay)
Hawkins, Paul
Page, Graham (Crosby)


Bessell, Peter
Heald, Rt. Hn. Sir Lionel
Pike, Miss Mervyn


Birch, Rt. Hn. Nigel
Higgins, Terence L.
Prior, J. M. L.


Boyd-Carpenter, Rt. Hn. John
Hiley, Joseph
Pym, Francis


Braine, Bernard
Hirst, Geoffrey
Ramsden, Rt. Hn. James


Bromley-Davenport, Lt.-Col. Sir Walter
Hogg, Rt. Hn. Quintin
Rees-Davies, W. R.


Brown, Sir Edward (Bath)
Holland, Philip
Ridsdale, Julian


Bruce-Gardyne, J.
Hooson, Emlyn
Russell, Sir Ronald


Buchanan-Smith, Alick (Angus, N &amp; M)
Hutchison, Michael Clark
Scott, Nicholas


Buck, Antony (Colchester)
Iremonger, T. L.
Sharples, Richard


Campbell, Gordon
Jenkin, Patrick (Woodford)
Shaw, Michael (Sc'b'gh &amp; Whitby)


Carlisle, Mark
Johnson Smith, G. (E. Grinstead)
Smith, John


Clegg, Walter
Johnston, Russell (Inverness)
Taylor, Sir Charles (Eastbourne)


Cooper-Key, Sir Neill
Jopling, Michael
Taylor, Frank (Moss Side)


Costain, A. P.
Kimball, Marcus
Teeling, Sir William


Crosthwaite-Eyre, Sir Oliver
King, Evelyn (Dorset, S.)
Thatcher, Mrs. Margaret


Crouch, David
Kitson, Timothy
Turton, Rt. Hn. R. H.


Cunningham, Sir Knox
Knight, Mrs. Jill
Vaughan-Morgan, Rt. Hn. Sir John


Dalkeith, Earl of
Legge-Bourke, Sir Harry
Wainwright, Richard (Colne Valley)


Dance, James
Lewis, Kenneth (Rutland)
Walker, Peter (Worcester)


Davidson, James (Aberdeenshire, W.)
Lubbock, Eric
Ward, Dame Irene


Dean, Paul (Somerset, N.)
MacArthur, Ian
Weatherill, Bernard


Deedes, Rt. Hn. W. P. (Ashford)
Macleod, Rt. Hn. Iain
Webster, David


Doughty, Charles
Macmillan, Maurice (Farnham)
Wells, John (Maidstone)


Drayson, G. B.
Maddan, Martin
Whitelaw, Rt. Hn. William


Eden, Sir John
Mawby, Ray
Wills, Sir Gerald (Bridgwater)


Elliott, R.W.(N'c'tle-upon Tyne, N.)
Maydon, Lt.-Cmdr. S. L. C.
Wilson, Geoffrey (Truro)


Farr, John
Mills, Stratton (Belfast, N.)
Winstanley, Dr. M. P.


Glover, Sir Douglas
Mitchell, David (Basingstoke)
Wood, Rt. Hn. Richard


Grant, Anthony
Monro, Hector



Gresham Cooke, R.
Montgomery, Fergus
TELLERS FOR THE AYES:


Grieve, Percy
More, Jasper
Mr. Reginald Eyre and


Grimond, Rt. Hn. J.
Morrison, Charles (Devizes)
Mr. Anthony Royle.


Gurden, Harold
Mott-Radclyffe, Sir Charles





NOES


Albu, Austen
Davidson, Arthur (Accrington)
Freeson, Reginald


Anderson, Donald
Davies, Dr. Ernest (Stretford)
Gardner, Tony


Archer, Peter
Davies, Harold (Leek)
Gourlay, Harry


Armstrong, Ernest
Davies, Ifor (Gower)
Gray, Dr. Hugh (Yarmouth)


Ashley, Jack
Dell, Edmund
Gregory, Arnold


Bacon, Rt. Hn. Alice
Diamond, Rt. Hn. John
Grey, Charles (Durham)


Barnes, Michael
Dobson, Ray
Griffiths, David (Rother Valley)


Barnett, Joel
Driberg, Tom
Griffiths, Rt. Hn. James (Llanelly)


Beaney, Alan
Dunnett, Jack
Hamling, William


Bidwell, Sydney
Dunwoody, Mrs. Gwyneth (Exeter)
Harper, Joseph


Bishop, E. S.
Dunwoody, Dr. John (F'th &amp; C'b'e)
Harrison, Walter (Wakefield)


Booth, Albert
Ellis, John
Haseldine, Norman


Boston, Terence
English, Michael
Hattersley, Roy


Bray, Dr. Jeremy




Brooks, Edwin
Ennals David
Hazell, Bert


Broughton, Dr. A. D. D.
Ensor, David
Herbison, Rt. Hn. Margaret


Cant, R. B.
Faulds, Andrew
Hilton, W. S.


Chapman, Donald
Fernyhough, E.
Hobden, Dennis (Brighton, K'town)


Coleman, Donald
Fletcher, Ted (Darlington)
Horner, John


Concannon, J. D.
Forrester, John
Houghton, Rt. Hn. Douglas


Corbet, Mrs. Freda
Fraser, John (Norwood)
Howie, W.


Dalyell, Tam
Fraser, Rt. Hn. Tom (Hamilton)
Hoy, James




Huckfield, L.
Marquand, David
Richard, Ivor


Hughes, Hector (Aberdeen, N.)
Mayhew, Christopher
Robinson, W. O. J. (Walth'stow, E.)


Hughes, Roy (Newport)
Mikardo, Ian
Roebuck, Roy


Hynd, John
Millan, Bruce
Rose, Paul


Janner, Sir Barnett
Miller, Dr. M. S.
Ross, Rt. Hn. William


Jenkins, Hugh (Putney)
Milne, Edward (Blyth)
Rowland, Christopher (Meriden)


Jones, T. Alec (Rhondda, West)
Molloy, William
Ryan, John


Kelley, Richard
Morris, Alfred (Wythenshawe)
Shaw, Arnold (Ilford, S.)


Kerr, Dr. David (W'worth, Central)
Morris, John (Aberavon)
Sheldon, Robert


Kerr, Russell (Feltham)
Moyle, Roland
Silkin, Rt. Hn. John (Deptford)


Ledger, Ron
Murray, Albert
Silverman, Julius (Aston)


Lee, Rt. Hn. Frederick (Newton)
Norwood, Christopher
Swain, Thomas


Lestor, Miss Joan
O'Malley, Brian
Swingler, Stephen


Lipton, Marcus
Oram, Albert E.
Taverne, Dick


Luard, Evan
Orbach, Maurice
Tinn, James


Lyon, Alexander W. (York)
Orme, Stanley
Urwin, T. W.


Lyons, Edward (Bradford, E.)
Owen, Will (Morpeth)
Walker, Harold (Doncaster)


Mabon, Dr. J. Dickson
Page, Derek (King's Lynn)
Weitzman, David


McCann, John
Park, Trevor
Wellbeloved, James


MacColl, James
Parker, John (Dagenham)
Whitaker, Ben


MacDermot, Niall
Parkyn, Brian (Bedford)
Whitlock, William


Macdonald, A. H.

Williams, Alan Lee (Hornchurch)


McKay, Mrs. Margaret
Pearson, Arthur (Pontypridd)
Williams, Mrs. Shirley (Hitchin)


Mackenzie, Gregor (Rutherglen)
Pentland, Norman
Willis, George (Edinburgh, E.)


Mackintosh, John P.
Perry, Ernest G. (Battersea, S.)
Wilson, William (Coventry, S.)


McMillan, Tom (Glasgow, C.)
Price, William (Rugby)



McNamara, J. Kevin
Probert, Arthur
TELLERS FOR THE NOES:


Mahon, Peter (Preston, S.)
Rankin, John
Mr. Neil McBride and


Mallalieu, E. L. (Brigg)
Reynolds, G. W.
Mr. Ioan L. Evans.

New Clause 34.—(EXPENDITURE ON "KNOW-HOW".)

(1) Where any company resident in the United Kingdom incurs expenditure for the purpose of its trade upon the acquisition of or the right to use know-how such expenditure is to be treated—

(a) as an allowable deduction in computing the amount of profits or gains of that company's trade to be charged to corporation tax or provided the company so elects;
(b) as expenditure eligible for relief under the provisions of Part X of the Income Tax Act 1952 where such expenditure is directly related to capital expenditure incurred subsequently by the company which qualifies for relief under the said Part X.

(2) In this section "know-how" means any non-patented data, special knowledge or skill, technique, process, formula, design, model or plan, or information concerning industrial or commercial experience related to the company's trade.—[Mr. Patrick Jenkin.]

Brought up, and read the First time.

Mr. Patrick Jenkin: I beg to move, That the Clause be read a Second time.
We are obviously nearing the end of our evening's work, and I am not surprised that the Government have decided that possibly it is time to call it a day. With their majority dwindling away, I can understand that they are reluctant to go on any longer.
The Clause is intended to expose and to remedy a curious anomaly, a product of the development of the case law dealing with the taxation treatment of "know-how" payments. If a company wants to

use a process, or to make a product, and it has not got a process to do it, it can either use its own research to discover one, or buy the process from somebody else.
I should make it clear that we are not talking about patents. Patents are entirely different, and the taxation treatment is governed by Statute. With a patent, by definition the information is available to the public, but protected by the patent laws, and the taxation treatment is quite clear. If one company takes a licence from another, and a running royalty is paid, that is treated as a revenue expense and receipt as the case may be. Before the Corporation Tax it was regarded as an annual payment, and tax was deducted at the source. Now, under the Corporation Tax, in the hands of a payer it is a trading expense, and in the hands of a recipient it is a taxable receipt.
Similarly, if there is a lump sum, the position is covered by Statute. Under the Income Tax Act of 1952 a lump sum paid for a patent is eligible for annual allowance and may be written off over the life of the patent. In the hands of the recipient, there is a slightly more artificial rule. He is entitled to spread the receipt over six years, which is a great advance on having to take it in as a taxable receipt over one year.
I mention the question of patents to contrast the position of "know-how" payments, because these are not governed


by Statute. A "know-how" payment is a payment for secret information of one sort or another, for information of special techniques of a wide variety, and I refer the Committee to subsection (2) which sets out the definition of "know-how" for the purpose of the Clause. It is almost a term of art. Taxation here is left to the general law and is based on the broad distinction between capital and income. If, in return for "know-how", a royalty is paid, it is regarded as income, both as a deduction from the payer and as a receipt for the recipient, though it may be regarded as an annual payment for tax purposes.
But the lump sum down payment for a grant of "know-how", brings this anomalous position, that most sums received for such a grant are regarded as taxable income, trading receipts, of the recipient, whereas the company which makes a lump sum payment for "know-how" rarely, if ever, can deduct it as a trading expense. The new Clause would give the trader the option of treating the demand as a deductible expense for that year or of following the patent pattern which entitles him to an annual allowance under Part X of the Income Tax Act of 1952.
The history of this curious anomaly is interesting. For many years, lump sum payments were regarded as capital in the hands of both the recipient and the payer and the Income Tax Acts were not applied. The Inland Revenue then began to argue, in a number of cases before the courts, that, if a company engaged substantially in research, and, as well as using the products of its research in manufacture, exploited its research by licensing products to other people, here or overseas, then this was to be regarded as part of its trade, and, notwithstanding the fact that a licence might be a lump sum to the company, this was as much a trading receipt as, for instance, the proceeds from the sale of its products and that it was irrelevant whether it came in a single payment or a running royalty.
The leading case on this is one about aero-engines, Rolls-Royce v. Jeffrey in 40 Tax Cases, page 443, in which Lord Radclyffe said:
It seems to me that, so long as it kept its 'know-how' to itself, it used it for the manu-

facture of its own engines, and its value was expressed in the succesful sales which it achieved of those products … it is clear that it saw that, having the 'know-how', it could derive profit from the manufacture of its engines, even by others, in parts of the world where it either could not or would not sell or manufacture them itself, provided only that it equipped those others with the requisite expertise. So it turned the 'know-how' to account by undertaking, for reward, to impart it to the others in order to bring about this alternative form of manufacture.
A number of cases since have consistently held, following that case, that, where there is a pattern of trading in the granting of licences for "know-how", this is to be regarded as part of the trading activity.
The only exception—I said that this did not apply in every case—is that of a company which disposes outright of a definite section of its business, in which case, although it can be called the grant of a licence for "know-how", it is, in fact, a disposal of the business. The leading case was the drug case in Burma, the Evans Medical supplies case, but this is very rare and difficult to establish and, particularly where there is a consistent pattern of licensing overseas, even though to grant the licence would wholly cut out the company from trading in that territory, this tends now, almost universally, to be regarded as a revenue receipt. It is a question of the course of conduct, the manner in which the company does business. In the great majority of cases, a payment for "know-how" is a revenue receipt.
I now turn to the payment in the hands of the payer, the licensor. Here, a line of cases establishes clearly that this is always regarded as a capital disbursement. Under the old rule laid down by Lord Cave in the Atherton case, it created an asset or advantage of enduring benefit to a trade. That was as long ago as 1926, and the law on this matter has stayed still since then.
For instance, evidence that the "know-how" may be a wasting asset, that someone else may catch up in a matter of years and achieve equality is irrelevant. No allowance can be made for tax. There can be no capital allowance and nor is it deductible as an expense. If one pays an annual royalty for "know-how", that is allowed, but if it is a lump sum, it is disallowed, with no account taken


of the course of conduct of the business concerned.
It is irrelevant whether a company may have made a series of lump sum payments for different pieces of "know-how": they are all regarded as capital disbursements and therefore do not come into account in computing the tax liability. I know of no case where, on the Rolls-Royce pattern, there has been a course of conduct of a business in which the Revenue have allowed a lump sum payment for "know-how" as a deduction.
10.0 p.m.
It may be asked, "If there is this difference between the Revenue and the capital treatment of a consideration for 'know-how', why do not companies always insist on running royalties? Why do they accede to demands for a lump-sum payment?" The answer is that this does not rest with the paying company. The licensor may have something to say about it. Having spent a large sum on research, he is not prepared to let it go on the rather uncertain sales on which the royalty may be based. He wants to get something back in the kitty straight away.
Thus, the usual form of transaction is to demand a lump sum payment for part of the consideration and a royalty, calculated on the sales, in respect of the balance. The licensee is not in a position to dictate that he will pay only the royalty and he must pay a lump sum.
This is, without doubt, a trading expense in the ordinary commonsense meaning of those words. It is a necessary expense which is incurred in order to earn profits, and this is particularly important in the science-based industries, where the exchange of "know-how" and patented information is growing rapidly each year.
I have found it difficult to obtain figures, but I have tried to calculate what might be the cost of making this change in the law. There are some quite accurate figures of this country's overseas balance of licensed payments, but there seem to be few figures on the internal trade in "know-how" and patents. Expenditure under this head does not seem to be calclulated as a separate item. One can get some figures from an old F.B.I. Report, published in 1961, called "Industrial Research in Manufacturing Industry", and these suggest that the

total amount spent on the purchase of "know-how" by companies was about 3 per cent. of the total research expenditure incurred within those companies. If it was 3 per cent. in 1961, it might be 4 per cent. or 5 per cent. now.
More recent figures were given by a Board of Trade survey made in 1964 and published in the Board of Trade Journal of July, 1966, subsequently referred to in the recent publication Statistics of Science and Technology, published earlier this year. They showed that, on the balance of transactions, receipts for patents and "know-how" in this country totalled about £44 million, whereas expenditure overseas was about £41 million. On this trade we therefore have a credit balance of about £3 million. It could be suggested—and I admit that this is an extremely rough estimate—that the amount of internal trade in this respect might be about the same. However, as I said, this includes patents and running royalties for "know-how".
If one goes back to the 3 per cent. figure of the total internal expenditure on research, and links that with what that expenditure is in the current year—about £452 million—this suggests that the total amount spent for "know-how" is about £10 million to £12 million, but part of that will be in the form of running royalties and the figure will, therefore, be something less than that; perhaps between £5 million and £10 million. This might be the amount spent annually by companies in Britain on acquiring "know-how" in exchange for lump sum payments. On an assumption of tax at 40 per cent., that gives a total cost of about £4 million a year. I admit that this is a rough-and-ready calculation and I stand to be corrected if the Chief Secretary has more accurate figures.
Is this a necessary feature of trading? The answer is, "Emphatically yes". The National Institute published a commentary on the F.B.I. paper, which I quoted, in its issue of May, 1962, in which it was stated:
… the evidence strongly suggests that licensing arrangements are almost always supplementary to the firm's internal research activity and only very rarely a substitute for it".
The F.B.I. paper quoted a comment from a large chemical firm, which stated:
We acquire manufacturing know-how from outside organisations when the information is


not available from our own research activities or when offered processes appear better than those available from internal sources. It is a good spur to research to have this competition from outside organisations. Licensing arrangements also allow greater concentration of internal effort on major areas. Licensing by us of some of our know-how to other companies helps to support adequate research in these licensed areas.
This shows that this business of "know-how" is an adjunct to the technical effort that must be made if we are to keep abreast of our competitors.
It is idle to expect any country, let alone any firm, to be self-sufficient in this matter, and any country or firm which attempted to do so would soon find itself struggling to keep abreast of its competitors. The exchange of information—including secret information—is vital to the technological progress of the science-based industries.
This point is relevant to the need to grant tax allowances of the type we are discussing, for if the science-based industries—the innovating industries—are to continue to expand, develop and afford to do their own research, they must have the necessary profits out of which to do it.
An interesting paper entitled "Prices, Products and Innovations", read in February of this year by Dr. Gordon Fryers, a well-known figure in the pharmaceutical industry, contained this comment:
Research spending must in the long term be linked to the returns from sales and the profit margins in prices. Thus prices, profits and competitive innovation are intimately linked.
I believe that to be a very true statement. H goes on to say in the rest of the paper how our tax system appears almost to discriminate against the innovator as opposed to the traditional industry—what, in the pharmaceutical industry, is called the generic producer. He quotes Corporation Tax, high rates of personal tax on scientists, and so on.
If an innovating firm, in order to keep abreast of developments, has to buy some of its "know-how" and processes from other companies and has to spend part of that money in a lump-sum payment, it is allowed no tax deduction at all. It is quite a ridiculous anomaly. If the information is patented, it is covered, whether it is running royalty or lump-sum receipt. "Know-how" for running royalty is

covered, but if it is "know-how" in return for a lump sum payment that lump sum payment is not regarded as deductible for tax payment.
The new Clause would remedy that situation, and would be an overdue removal of a small but significant brake on industrial modernisation and technical innovation in what must be by any standards a vitally important sector of British industry. For that reason, I commend it to the Committee.

Mr. Diamond: Let me say straight away that I agree completely with the hon. Gentleman that this new development that we call by the rather vague term of "know-how", but which we all understand very well, is an essential part of developing technological advance, and that it is not the desire of the Government or of industry to put any bar in the way of development of this kind. For this country, particularly, it must be something that we are very interested in fostering.
The hon. Gentleman is quite right in saying that the law makes no express provision, either by Corporation Tax or Income Tax, as far as I am aware, for "know-how". But I was rather surprised to hear him describe the practice today, because my information is that by and large there is at present no great difficulty for the paying company, in terms of either paragraph (a) or (b) of his own new Clause; that is, either as revenue or capital expenditure ranking for capital allowances or grant. There would be no difficulty in most cases of such expenditure so ranking. The hon. Gentleman suggested that there were cases where a substantial payment is treated as capital expenditure which does not rank for any further relief at all.
I recognise that even if present practice covers the area very largely, this is a developing field and there are those who fear that new developments may not be covered satisfactorily—and, I repeat, the law does not expressly provide for this when perhaps it should. But this is a big topic and it is one on which I am not, I regret to say, able to offer a considered opinion at the moment. It deserves very careful consideration and, as the hon. Gentleman has pointed out, there is the problem not only of relieving the taxpayer but of looking after the


Revenue, too, in terms of clarifying the taxability of a receipt, either lump sum or current receipt, and preparing a satisfactory code.
I therefore suggest that, to give us full time to have the matter very fully considered, the hon. Member might be good enough not to press the Clause. The Clause, as he has put it forward, would not be wholly satisfactory. I do not quite know why he has limited it to companies. A partnership or an individual surely would be just as interested, and we would want to widen it in this way.
I hope that the hon. Gentleman feels that I understand the problem, and we will look at it in a very similar way in the way that he would look at it. I hope that he will feel that this is not a problem which we can satisfactorily deal with between now and Report—nothing like it. I hope that he will feel that it is an area where we would and should consult industry and the professions fully.
In these circumstances I hope that the hon. Gentleman will feel, if I give a very clear undertaking, as I now do, that we will have the whole of this field very carefully examined between now and next year—I could not indicate before that—and that we will consult in the way that we have indicated, that his speech has been very fruitful and useful, that he will accept our assurance that we are very grateful for it, and that he will take the view that there is no need at this time to press the Clause to a Division.

Mr. Patrick Jenkin: I am sure the whole Committee will have recognised that as a most helpful and forthcoming reply from the Chief Secretary. I entirely take his point that the Clause as drafted is limited to companies, but this is because it was thought that the vast majority of cases of "know-how" will emanate from companies, though patents may well emanate from individuals. The necessary techniques and expertise to develop saleable "know-how" are generally beyond the capacity of an individual, or even of a partnership. Clearly, the principle is exactly the same, and if the Government will look at this we shall have no objection whatever to their looking at it in the whole context.
As to the present treatment, I was most interested to hear what the Chief Secre-

tary had to say. Likewise, those who will have to deal with the situation in the intervening year will be most interested in his speech. I have made some inquiries about this, and I have been told of no case where a lump-sum down payment has been allowed as a deduction. The capital allowance provision is entirely statutory, so it could not be allowed as a capital allowance in the same way as a patent is, so it would not come within the relevant section of the Income Tax Act, 1962.

Mr. Diamond: It could be a lump sum payment related to a physical asset and therefore be added to the cost of the asset and rank in that way.

Mr. Jenkin: I recognise that companies will sometimes go to very great lengths to achieve just exactly that situation, because, if they set about it in a more straightforward way, they would be penalised. I entirely take the right hon. Gentleman's point on that.
Though we are, perhaps, a little disappointed that the Government cannot do anything about it this year, we recognise that this is a complicated, complex field and that clearly there must be full consultation before a Clause is written into our taxing statutes which would do justice both to the taxpayer and to the Revenue.
In these circumstances it would be wrong for me to advise my right hon. and hon. Friends to press the matter to a Division tonight. We shall look forward to seeing what the Government produce in next year's Finance Bill. In the meantime, I beg to ask leave to withdraw the Motion.

Motion and Clause, by leave, withdrawn.

Mr. Iain Macleod: I beg to move,
That the Chairman do report Progress and ask leave to sit again.
We have been accustomed to moving this Motion at a few minutes to Twelve o'clock, but there is no harm in lowering the average a little and trying it at the other end of a full day's work. There are only two debates left, of which one will be certainly short. The other, the charities debate, is an important debate, and if we started it now, we should run into trouble, particularly as it is Thursday night with Members representing Scottish constituencies wanting to catch


their trains, and with all the other complications which we know about in the House of Comomns. We can be quite confident now that we shall be able to complete the Committee stage of the Bill in, or even slightly less than, the half day which is set aside on Wednesday of next week. Rather than start the charities debate now, I suggest that the Government agree that we report Progress.

Mr. Diamond: I am most grateful to the right hon. Gentleman not only for what he said, which covers a certain matter most satisfactorily, but for the co-operation which he and his right hon. and hon. Friends have given throughout the day. I readily assent to his proposal.

Question put and agreed to.

Committee report Progress; to sit again Tomorrow.

HOUSE OF COMMONS (SERVICES)

Mrs. Braddock discharged from the Select Committee on House of Commons (Services); Dr. David Kerr added.—[Mr. McBride.]

ADJOURNMENT

Resolved, That this House do now adjourn.—[Mr. McBride.]

Adjourned accordingly at a quarter past Ten o'clock.